- Denise Williams photo
Customers doing their Christmas shopping.
Dennise Williams, Staff Reporter
DEVALUATION, taxes, reduced consumer spending power and competition from imported goods will be the challenges that retailers will face in the 2003 Christmas shopping season.
But while the odds against the Jamaican economy are stacked, some retailers have been able to carve a niche for themselves and bring shoppers to their doors from late November.
However, all retailers interviewed by the Financial Gleaner are optimistic that the traditional week before Christmas rush will come to the rescue and boost Christmas sales. Garth Walker, vice-president of marketing at Mainland International Ltd., stated that, "This year has been better than 2002. Things are not looking bad at all. Our sales are up by 25 per cent overall for the year. And this year has been a better year than last."
The driving force behind the increase in sales has been the increase in value of the items purchased by customers. Explained Walker, "Last year, if we had 10 customers they would buy tile, paint and lumber. This year, the same 10 customers are also buying tile, paint, lumber, appliances and furniture. So each person is spending more. Remember that we are not just a hardware, we are a home centre and so the home centre side is really driving sales. By next week, sales of lumber, steel, blocks and cement will slow down. But on the home centre side, the purchases of furniture, bathroom fixtures, appliances and paint will pick up."
Wendel Carby of Carby's Discount Centre, also reports double digit sales increases for the Christmas shopping season." Things are really picking up. From last weekend our sales have increased. Right now in early December, things are looking as if they are going to be great. This Christmas will definitely be better than 2002, as our sales have improved by around 20 to 25 per cent."
FINDING WAYS TO MINIMISE DEVALUATION EFFECTS
In terms of devaluation and the other shocks to the economy, Carby has found a way to minimise the effects on his business.
"Devaluation didn't affect us too badly. We try to keep our prices low and we accept a low mark up. Our prices range from $95 up. The low prices keep customers coming because people don't have a lot of money to spend. To be successful, retailers have to be willing to sell their items at low prices."
Carby stated that in his stores the ladies fashion clothes are 'selling like mad.' At his store, the average spending is around $2,000.00. Another retailer that is doing well is The Best Decorators Ltd. When the Financial Gleaner visited their Southdale Plaza location, their exhausted staff member who was juggling several customers at once exclaimed, 'have you ever heard of too much business?' While the many customers were trying to decide what drapes to buy, she informed the Financial Gleaner that, "We have a great amount of business this Christmas. We will stop taking orders this week so that we can complete all the installations in our clients homes." However, other retailers we spoke to had a more calm start to the holiday shopping period.
At Decorator's Corner, we were told, "well I think that the season is going pretty much as expected. In the first week, it was slow. But we are pretty satisfied with the level of sales. We know that it picks up in the last 10 days of Christmas. After this weekend, things get pretty hectic." And devaluation has affected Decorator's Corner, but they have taken it in stride. "We have worked on our margins. We try to keep our prices affordable because it makes no sense to have goods staring back at you, and since our products are unique, quality items from South Africa, Canada and England, when people shop, they know that they are getting value for money."
Now while Decorator's Corner stated that it was too early in the month to determine if Christmas 2003 was more profitable than last year, the Financial Gleaner was informed that the average customer spends about $5,000 during their Christmas shopping. "People, when they shop, tend to buy a set of co-ordinating pieces. And right now we are selling a lot of interesting accent pieces and linens for the season." Western Sports is in a 'wait and see' mode. Said the manager of the Twin Gates sporting goods store, "not only has the devaluation of the dollar affected sales, but as of May 1, this year, all our goods became taxable. Before, many sporting goods did not attract GCT, but now they are 15 per cent more expensive. But this year we are still hopeful that sales will go well. Somehow at the last minute, things pick up."
A 'WAIT AND SEE' MOOD
At Answers for Children (AFC), the mood is also 'wait and see'. The manager told the Financial Gleaner that, "right now, sales are not too bad; but not as bright as last year. We are accustomed to a lot of late shoppers, so we cannot predict how the season will go as yet. But it will probably be a little less in terms of sales than last year, given the state of the economy. It is difficult for people to do their regular shopping." The negative movement of the local currency has also affected AFC customers. Said the manager, "a lot of our regular customers are not spending the large amount that they used to. So far in December, the average spending per customer has been about $2,000.00 to $2,500.00. Last year the figure was $3,500.00 to $4,000.00. But definitely we will have customers who will do their shopping at the last week. We are optimistic and hoping for the best." And optimism is the watchword for retailers who are not satisfied with the level of their sales. At a local lingerie and leather boutique, the sales rep informed the Financial Gleaner that, "sales are very bad. People are not coming in. I don't know if people are waiting till the last minute or what. We hope that when people sort out their budget they will come in and shop." And for Roderick Watson of Watson's Farms, the local grower of Christmas trees, the imported goods are biting into sales. Nonetheless, the positive outlook carries him through. Explained Mr. Watson, "sales are slowish. It is either the economy or the imported trees. Right now, our sales are 10 per cent less this year than in 2002. If you ask me, Jamaicans have a foreign mentality and so the Canadian and Cedar trees sell.
CHEAPER TREES, BETTER QUALITY
"My trees are much cheaper than the ones sold in the nurseries. I sell for $300 per foot on the farm and my trees can retail from between $400 to $500 per foot, while I get to understand that the imported ones are being sold for $942 per foot. We are well below in price but our quality is much better. Still, we are trying to hold our own and are still encouraged by the sales that do come in." And so the prospects for the retail sector this Christmas are mixed. Will it be a bright Christmas for retailers? Only time will tell. But according to Mr. Carby, while his sales are satisfactory, the shoppers have definitely started off slowly this year.
"Usually people come out in October to beat the November/December rush. They do most of their shopping early. I noticed that those shoppers didn't come out, not even in early November. It wasn't until the last weekend in November that Christmas shoppers started to appear." And if this Christmas is as good as or better than 2002, it is not, in the opinion of Mr. Walker, an indication that the economy has improved. "In my personal opinion, throughout the year, people have spent less and saved their money. So whether they have it or not, they will upgrade their house in Christmas. But the performance of the retail sector is not a good way to judge the economy. People will starve themselves throughout the year to have money to spend in Christmas."
