Holidazed: Retail prices may creep up before Christmas

If you’re someone who puts off your holiday shopping until the last minute to save a few bucks by scouring for the best “deals” and taking advantage of those absolute bargain basement prices, I’m afraid you may be in for a rude awakening this holiday shopping season. If my sense of the retail landscape is correct, I think it’s possible we’ll see prices increase as Christmas gets closer.



Here’s why: Inventory levels are the leanest they have ever been for retailers during this time of year. Gone are the days when retailers had to discount everything in order to avoid an overabundance of inventory after the holidays. Combine that with a shopping season that keeps starting earlier and earlier — what used to begin post-Thanksgiving started in mid September this year — and you’re faced with the risk that some items (particularly the most popular toys and electronics) may be in higher demand than the supply can meet. Instead of adjusting prices down to account for a surplus of remaining end-of-season inventory, retailers — perhaps even some of the biggest and most familiar names in the business — may find they have to tweak prices up.



If I’m right, then the best time to buy is now. Once we get past the first week of December, I think sizes and selection will be limited — and so will the deals. For you die-hard bargain shoppers, you too, may need to start your “season” a bit earlier. The good news is Black Friday now starts on Gray Thursday (midnight or even earlier on Thanksgiving Day), so there’s no need to wait until Christmas Eve.



Something else that will probably be limited this year is retailers’ need for “extra” seasonal employees. The longer shopping season, earlier start times to the Black Friday madness and the increasing number of online shoppers make it unnecessary to have so many sales associates on the floor. It may also mean that traffic in brick-and-mortar stores is less robust. Another reason downsizing space may be the right choice for retailers in the future.



While our industry continues the struggle to find the “new norm,” the holidays are no exception. I think it will be interesting to see how this holiday season plays out. As I’ve mentioned in previous columns, I’ve certainly been wrong before…this may be the prediction that lands me a lump of coal.



What do you think? Please make a public comment below or feel free to e-mail me privately at [email protected].

Jeff Green is president and CEO of Phoenix-based Jeff Green Partners (jeffgreenpartners.com), a leading consulting firm specializing in retail real estate feasibility, retail expansion planning, medical retail planning, location analysis and commercial land use.

Click here for past columns by Jeff Green.