Clues on the economy on display at the mall
Local retailers, shoppers can be good indicators
NEW YORK — Attention armchair economists: You don’t need spreadsheets to get a handle on how this year’s holiday shopping season is going. Just keep an eye on sales of push-up bras.
You read that right. Retail analyst John Morris says that if we see brisk sales of the “Miraculous’’ bras at Victoria’s Secret, it could be a good indicator of two important economic trends.
■ If women buy these high-priced bras, they’re probably willing to buy other things for themselves, too. That would be a shift from the last two holiday seasons, when shoppers mostly bought for others.
■ Strong sales of lingerie would also suggest that shoppers are willing to indulge. That would be a change from last year, when they stuck to basics. The bras, launched a year ago and sold with the tagline “Hello, Bombshell,’’ cost between $49.50 and $250, more than most bras.
“The Bombshell bra has been selling out, and that’s not because husbands are buying them for their wives,’’ said Morris, who works at BMO Capital Markets. “It’s the wives buying for themselves.’’
Stores that sell intimate apparel are hardly the only place for amateur economists to gauge the pulse of US shoppers. Head to any mall during the holiday season and pay attention to how people are paying for things and how many discounts retailers are using to win over shoppers. Here are some things to look for:
Offers of 25 percent to 30 percent off shouldn’t set off any alarms. Discounts of that size have become standard practice. Don’t be surprised if you see even larger promotions, like 40 percent to 50 percent off, in certain areas of a store.
If discounts get bigger or seem out of the ordinary, watch out. Two years ago, at the height of the financial meltdown, retailers slashed prices by as much as 90 percent to draw in shoppers who had been unwilling to buy much of anything.
“Keep an eye on the breadth of promotions throughout the store,’’ said Michael Dart, a retail strategist at consulting firm Kurt Salmon and coauthor of the new book called “The New Rules of Retail.’’ “When they are across every corner, that means they are unplanned.’’
Another giveaway: An easel outside the store promoting even more discounts. That means the retailer didn’t plan for that promotion, said Morris of BMO Capital Markets.
Retailers hope people will return to buying more traditional gifts this holiday season.
“This year, we are seeing that customers have adjusted to the environment and feel that the economy is gradually improving, and are therefore more receptive to the idea of opening up their wallets and spending this season,’’ said Steve Lawrence, who helps decide what products get stocked in JCPenney stores.
To see if that’s happening, watch to see if shoppers are buying more gifts like perfumes, cashmere sweaters, or jewelry. If you see them carting out big-ticket items like TVs or iPads, that is good news, too.
Total US credit card balances dropped by $8.3 billion to $813.9 billion in September, the 25th consecutive monthly drop since the onset of the credit crisis in the fall of 2008, according to Federal Reserve data.
Bernard Baumohl, chief global economist at the Economic Outlook Group, in Princeton, N.J., doesn’t want to go back to the days of overleverage, but he thinks something to watch for this holiday season is whether there is a resurgence of purchases on credit cards.
“Debt, and the willingness to take on debt, are important barometers of consumer confidence,’’ Baumohl says.
Why? Baumohl says people are more willing to add to their credit card balances when they feel confident in their own finances and secure in their jobs.