Holiday shopping hits skids

Shopping malls across the country are decked with sales as the holiday season gets underway, but even with plenty of fanfare, both retailers and shoppers seem to be reining in their expectations.

Shopping malls across the country are decked with sales as the holiday season gets underway, but even with plenty of fanfare, both retailers and shoppers seem to be reining in their expectations.

The days of the holiday spending spree are a thing of the past, it seems, and more people are tightening their gift-giving budgets as they search for as many deals as possible.

“There’s actually not a lot of shopping activity, period,” said Susan Ditchburn co-owner of clothing stores Noise and Decibel in downtown Toronto.

“We are getting people who are buying gift certificates just so they can come on Boxing Week and buy things on sale.”

Blame it on the economy, which tore through the holiday season last year and hasn’t let up much since.

Statistics Canada reported that August retail sales rose 0.8 per cent to $34.5 billion, offsetting July’s decline.

However, they were also 3.7 per cent lower than the same time a year earlier.

Canadians are also worried about their jobs, after the country lost 71,000 jobs last month.

For bargain hunters waiting until the last minute, or even Boxing Day, this could be a year of disappointment.

Retailers are expecting the holiday boom to be more of a fizzle and have planned accordingly.

Across North America, the inventories at many stores have been slashed compared with last year, meaning that popular items will be especially hard to find.

Stores have also ramped up their sales early to capture as many shoppers as they can.

Toronto-area resident Sylvia Hricsovszky took those signs to heart when she started her Christmas shopping in September.

“In the past, sometimes I would leave things to the last minute,” she said.

“This year I’m worried that stores aren’t going to have a wide variety of items, and they may not be stocked as fully as they have in previous years. So I want to get it done as soon as I can.”

“When you shop early you can comparison shop” for the best price, she added.

Others like Christine Armstrong, a Toronto resident, haven’t started shopping, but they’re already planning to buy less than in previous years.

“My family has decided to do Secret Santa, so I only really have to (shop for) one person,” she said.

“I’m waiting until December because Christmas shopping means snow, but I’m going to keep my eyes open for sales.”

Retail watchers have witnessed similar sentiments across the country.

A study from Deloitte suggests that 44 per cent of Canadians plan to spend less this year during the holiday than they did over the past two years.

“Based on this year’s results, retailers should brace for a wave of shoppers later in December, as Canadians will delay purchases until there are substantial markdowns,” said Deloitte analyst Brent Houlden.

Consumers have become increasingly conscious of how deep retailers are willing to discount their products and that has put the pressure on store owners to start cutting early.

Smaller retailers like Noise and Decibel are feeling the pain as consumers often expect them to cut their prices as deeply as the big chain stores.

“I have never gone on sale before Boxing Day. I have stood my ground because I do have the luxury of having things other people don’t have,” said Ditchburn, whose stores sell high-end clothing targeted at teenagers and young adults.

However, this year she’s feeling the pinch to make some changes.

“When people don’t have enough money, and they get the same look from a place like H&M, they’re going there — even though they don’t care that it’s not going to last and not going to be a quality product.”

Ditchburn said this year she has seriously considered lowering prices earlier on some items to drive sales.

While retailers search for ways to motivate the consumer, a study from Ernst & Young suggests that holiday sales will be in line with the dismal results of last year.

“A flat prediction is not a healthy one for retailers,” said Ernst & Young retail analyst Daniel Baer.

“The consumer is looking for a lot of practicality — gifts that are useful.”

Shoppers don’t have to look any further than children’s toys to see further proof this is a tight year as some of the hottest-selling toys are also the cheapest.

Topping must-have lists this year is the Zhu Zhu Pets hamster, which sells for under $20, and is already out of stock at many stores. Toy analysts compare its sales to the interactive Furby, a decade ago.

Then there’s the more expensive Mindflex from Mattel, which uses brainwaves to move a ball through various obstacles. It sells for around $100, but is also a cheaper alternative to a video game system.

Canadian wireless carriers will also be ramping up campaigns for the iPhone, which is now available at all three major carriers after an exclusivity agreement ended with Rogers.

Retailers looking for hints on how to snag consumers might want to take some advice from Leslie Tavel, who was shopping at the Eaton Centre in Toronto.

“I was just at the Gap and had a (coupon) for 30 per cent off, and that certainly incented me to purchase,” she said.

“They also gave me another certificate for 40 per cent off, which is fantastic.

“I’m definitely going to go back,” she added.

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