Yes, there's no place like home for the holidays. Except maybe a shopping mall.
The holiday shopping season unofficially begins Friday, and an estimated 137 million shoppers are expected to hit the nation's retailers over the Thanksgiving Day weekend, credit cards at the ready.
The National Retail Federation is projecting a more subdued holiday season than last year. The trade group expects total holiday retail sales to increase 5% over last year to $457.4 billion. That's down from a 6.1% increase last year.
Spending, however, is expected to remain strong. The organization estimates that the average consumer will spend $791.10 this holiday season, up from $738.11 last year.
Going into the holiday season, some retailers have the edge as to where shoppers will spend those dollars.
Analysts say that
are among the potential winners this year. These chains all have seen strong sales growth lately, and are likely to build on that momentum.
"What separates losers from winners is not just strategy, but how well you execute it," says Howard Davidowitz, chairman of retail consulting firm Davidowitz & Associates. "It's the right merchandise at the right time in the right place. That's block and tackle in the retail business."
Davidowitz has a more bearish stance on the retail season overall. He predicts only a 3% overall holiday retail sales increase, and said his clients are telling him that business in November has been soft, and retailers are working hard to pull in shoppers.
"There more midnight madness sales, much more advertising," he says. "That's a reaction to poor sales. We're in a soft November, so that makes this Black Friday different from others. It's hard to cost-justify midnight madness sales, but if everybody else is having them, it's very hard to be the only guy to say 'I'm not doing it.' What you got out there is a war."
Richard Hastings, retail sector analyst at Smyth Bernard Sands, says that J.C. Penney and Kohl's have been boosted by consumer migrations away from the discounters, which likely will give them a bounce in sales.
But these midlevel chains might see some pressure from the world's biggest discounter,
. The retail behemoth, which has seen a series of weaker-than-expected monthly same-store sales numbers, started discounting popular items like electronics, toys and appliances early this year in an effort to win back customers.
"They have taken the price-leadership position," Davidowitz said. "What they're doing with electronics is out of this world. I think it will help them get back customers, but it might hurt them in the margins. They're getting back to where they ought to be: in the price leadership position."
For its part, Target has said it will match Wal-Mart's price cuts.
Among specialty chains, Hastings believes that
will be strong performers due to customer loyalty and product innovation.
He is less enthusiastic about the home improvement and home furnishings outfits, and furniture retailers, such as
Pier 1 Imports
. Both Lowe's and Home Depot have recently slashed the earnings forecasts for the year due to weakness in the housing market.
"The trend this year has been away from home furnishing and home improvement across the board," Hastings says, "and we do not expect this trend, so deeply connected to the housing recession, to reverse direction before the holidays."
Meanwhile, department stores, once spurned as a dying retail breed, have
made a big comeback, notes Kurt Barnard, president of Barnard's Retail Consulting Group. That could mean good news for companies like
Federated Department Stores
"Department stores are coming back into their own," he said. "Consumers want to see something new, even if they're not ready to buy something. If they see new things, they're attracted into the store to take a look-see, and that leaves the discounters with very little more than the continuing drum beat of low prices, which is OK, but sometimes it comes at the expense of gross margin."