Analysts expecting to see weak holiday retail sales figures

By Buck Wargo

Thursday, Dec. 24, 2009 | 2:05 a.m.

High unemployment and cautious consumer spending is expected to damper retail sales in Las Vegas once the holiday counts are completed at the end of the month, retail analysts said.

“Consumers have less money in aggregate than they did a year ago, and they are cautious with their spending,” said Brian Gordon, a principal with research firm Applied Analysis. “We are dealing with a difficult environment with housing prices remaining low to the peak and fewer people are employed than a year ago. The overall outlook remains challenging.”

Gordon said taxable retail sales released Wednesday for Clark County are a good barometer what’s happening during the holiday shopping season. October retail sales were down 19 percent compared to October 2008. Between July and October, taxable sales are down 20.7 percent compared to the same fourth months in 2008, Gordon said.

“If those current trends hold, we will see consumer spending down year-over-year during the holidays,” Gordon said. “Maybe CityCenter will moderate that, but overall we expect the sales value in December to be like the recent trends.”

Nationally, America’s Research Group reported sales in November and December may fall 1.2 percent because banks have reined in lending to consumers. The National Retail Federation projects a 1 percent holiday drop across the country.

“I think Las Vegas is no different than what we are seeing nationally except that we are one of the hardest hit states in the country,” said Pamela Ring, a retail consultant. “Whatever is happening in the nation is happening here in a stronger way. Our shopping economy is driven by the middle market. That is one of the sectors of the economy hit the hardest by the great recession we are going through.”

An official at General Growth Properties, which owns the Fashion Show Mall, Meadows Mall, Boulevard Mall and The Shoppes at the Palazzo and Grand Canal Shoppes, said at best he expects holiday sales to be flat and at worst fall slightly from 2008.

“We had slow movement in the holiday season until two weekends ago when it has picked up, and we have had strong traffic ever since,” said Jim McMichael Sr., the marketing manager for Fashion Show Mall.

McMichael said retailers won’t report any numbers until December ends but it appears that apparel is selling the best.

“There are going to be some retailers that have a solid holiday seasons, but there are going to be others that are slightly down,” McMichael said. “No one knew what we were going to be this year based on the economy, unemployment and housing situation. We know families are having a harder time, and they are looking to spend less and be a bit more cautious during the shopping season.”

Meadows Mall and Boulevard Mall have had their strongest showing in the teen and children’s category of stores, especially with clothing. Despite their caution on spending, families are focusing on buying for their children, McMichael said.

“We are definitely seeing strong sales from the family segment,” McMichael said. “The photos with Santa have done well. Families are focusing on the home more.”

Fashion Show Mall on the Strip, where tourists comprise 60 percent of the shopping most of the year, relies on 70 to 75 percent locals during the holiday shopping season, McMichael said.

Retail is more up and down at the Shoppes at the Palazzo where it relies on tourists and occupancy isn’t consistent, he said.

“Obviously, the economic situation with the tourist segment has seen lower hotel rates and that has definitely impacted spending,” McMichael said. “People are still shopping but they are spending less when they are in town.”

McMichael said retailers at the Palazzo are just getting ramped up for holidays because there is a lot of spending in the last 10 days of the year, especially when crowds arrive for the New Year’s celebration.