The Florida Retail Federation is projecting a 4 to 4.5 percent increase in sales for the 2013 holiday season -- a rosier outlook than originally predicted based on strong tourism numbers released Friday.
The Sunshine State's key economic indicators point toward a bustling holiday shopping season, despite the government shutdown earlier this year, the Florida Retail Federation predicts in its annual holiday shopping forecast.
"Santa is going to be pretty busy delivering coal in Washington this year, but we are cautiously optimistic that Floridians won't let the uncertainty manufactured inside the beltway tarnish their enthusiasm," said Rick McAllister, president and CEO of the state retail federation. "Unemployment is down; 401(k)s are up; and visitors are flocking to Florida. We have all the right ingredients for a holly, jolly shopping season."
Consumer spending accounts for about 75 percent of Florida's gross domestic product. McAllister said tourism is an important and often-overlooked component of Florida's consumer-based economy. The state is on track to hit the mark of 100 million visitors for 2013, and shopping is high on the list of their holiday agendas, according to the retail federation. Tourism numbers released Friday show that 72.6 million tourists visited the state in the first three quarters of 2013.
The federation initially projected a 3 to 4 percent in
crease in sales for the holidays before the tourism numbers were released.
"People who come to Florida almost always take home more than they bring, and they aren't limited to what they can fit into their suitcase," McAllister said. "Retailers are finding all kinds of ways to increase their tourism sales -- from discounted shipping to free suitcases."
The holiday shopping season accounts for 20 to 40 percent of a retailer's annual sales. Steady growth in year-over-year sales is a sign of increasing economic stability.
Nationally, the average increase in holiday sales over the past 10 years is 3.3 percent. From year to year, gains vary widely among different segments of the retail market.
Those brick-and-mortar shoppers are being lured to get into stores earlier this year. Retailers like Walmart started Black Friday-type specials throughout November, prompted by a combination of six fewer shopping days between Thanksgiving and Christmas this year and a desire to ditch credit cards, McAllister said.
Kmart, Sears and Walmart are all enticing shoppers with no-fee holiday layaways for customers who want to spread out their spending this season.
On Nov. 22, Kmart will launch a lease-to-own program for shoppers as a credit card alternative. Shoppers can take home the merchandise priced at $150 and up immediately and pay it off over up to five months. But with fees and interest charges, it's like having a credit card in many ways. For instance, the hot $399 PlayStation 4 would cost $553 after 10 bi-weekly payments of $33 plus paying off the balance and a balloon payment/lease premium.
In 2012, sales during November and December accounted for 24 percent of total annual revenue for department stores in the U.S. Toys, apparel, jewelry and electronics are typically the biggest drivers.
The top gift item this year will continue to be gift cards, McAllister said, as Americans spent $28 billion on gift cards last year, which when broken out meant Florida was around the $2 billion mark for gift card sales.
Outside of gift cards, the hottest gift this season is anticipated to be the PlayStation 4, which hits shelves midnight Friday.
"The PlayStation 4 is going out through the roof," McAllister said. "They're selling them for $400, and I think you've seen them online for $5,000 or something crazy. It's probably the hot technology item for the year."
Beyond gift cards and electronics, apparel, high-end jewelry and toys will continue to do well, while home furnishings are still struggling as the housing market slowly recovers, McAllister said.
Nationally, online sales are expected to grow by another 13 to 15 percent in 2013, and Florida could see a 15 percent increase online, McAllister said. Savvy consumers use technology to find out what products have the highest rankings in customer satisfaction and where they can go to get the best deals. Retailers are responding with their own technological innovations to improve the overall customer experience, including custom apps, mobile websites and in-store pickup of online purchases.
"Any retailer not aggressively going after online shoppers is making a major mistake, and most major retailers are smarter than that," McAllister said.
Even though the holiday shopping season is still officially defined as sales made during November and December, about 40 percent of shoppers begin buying gifts and decorations before Halloween each year.
Also, the busiest sales days of the year is the weekend before Christmas and not Black Friday. With Christmas on a Wednesday this year, retailers will keep track of how consumers shift their last-minute spending, McAllister said.
"I know people are going to be caught shortsighted about how much time they have, and there will be a big rush this year in the last few days," he said.
Even more are likely to spend part of their Thanksgiving Day shopping this year, as more stores open on the holiday. Kmart is opening at 6 a.m., rushing 41 hours straight through Black Friday.
"We wouldn't open if the consumer didn't want to be there," McAllister said. "Let's face it. The tradition of Thanksgiving is not just eat turkey and watching football. A lot of people whose tradition is to shop with family who are there visiting, helps them get ready for their Christmastime. A lot of folks think it's great sport."
Charles Schelle, business reporter, can be reached at 941-745-7095.