By Kristen Miller
With rising energy costs and a slumping economy, it’s no surprise that Americans cut back on their spending this holiday season. And it showed in end-of-the-year retail sales. According to an MSN article, many big retailers around the country, included Limited and Macy’s, reported unusually low holiday sales for November and December. Did Richmond stores feel the burn of cautious holiday spenders? Fashion Bug in the Richmond mall reported fairly good holiday sales, but sales are now dropping, said Teresa McKiddy, store manager for Fashion Bug.
“Now it’s like everything just dropped out,” McKiddy said. The stores sales are now down 50 percent, she added. “It’s normally slow, but never like that.”
Fashion Bug was up 31 percent for the holidays and had 50 percent off sales to keep sales up during the holiday season. Now, the store will have items marked half-off until March 1, when the spring season starts.
“Hopefully it will pick back up,” McKiddy said.
Also in the mall, DEB reported holiday sales were up for the Richmond store but down for the company as a whole. The store wasn’t allowed to have sales during the holidays because the store is always having sales.
“We were hoping we would but not until after Christmas,” Manager Jane Chumley said.
Bethany Hobbs, a sales associate for Maurices, said the store did reasonably well during the holidays, but not as well as last year.
William Birkenmeier, the store manager for J.C. Penney, reported good sales in November but a drop for December.
“It’s discouraging to have a loss in December,” Birkenmeier said.
Holiday sales drop at the Richmond branch were very minimal, about 1 percent, but still not normal. And, according to a press release on the J.C. Penney’s Web site, total department sales were down 4.5 percent.
The store changed its marketing plans and sent out direct mailers to regular customers to help boost sales. Sales are beginning to pick up for the store but are not fantastic, Birkenmeier said.
“We want to beat last year,” he said
So what does the economy look like for 2008?
Frank O’Connor, a professor of economics at Eastern, said 2008 is going to be a rough year and the economy will continue to slow down.
“The forecast is for the economy to grow by about 1.5 percent,” O’Connor said.
He said a typical growth year for the United States is about 3 percent.
“Many economists who are concerned think that the economy could decline in the first half of 2008,” O’Connor said.
John Harter, a professor of economics at Eastern, said businesses suffer when the economy is struggling.
“Different businesses are affected different ways,” Harter said. “By and large, when the economy slows down it is more likely to affect businesses that sell durable goods, things like cars, houses and so on. People are not making as much money, so they hold off on buying new goods where they can make old goods last longer.”
Harter also added that, if the slow down in the economy lasts and businesses continue to see declining sales, it could mean less spending for governments. And Harter said less spending in Kentucky is already happening because of budget cuts.
“How we respond to that will influence the students,” Harter said. “This could mean less of a budget for student jobs.”
Also, students who are looking for a job off-campus might find some jobs difficult to get if the economy continues to slide.
“As people earn less money, they will eat out less. Fast food and sit-down restaurants will need fewer workers,” Harter said. “This might not have happened yet, but it is a possibility down the road.