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Anxiety over the poor economy, including worries about home foreclosures, tightening credit and unemployment, has many retailers on pins and needles this holiday season. And it is especially the case with black retailers, who say an economic downturn can be devastating.
The Washington-based National Retail Federation forecasts this year’s holiday season sales will rise 2.2%, which is well below the 10-year average of 4.4% and the slowest sales growth since 2002, when holiday sales rose 1.3%.
“Current financial pressures and a lack of confidence in the economy will force shoppers to be very conservative with their holiday spending,” the federation’s chief economist Rosalind Wells says on the group’s Website. “We expect consumers to be frugal this season and less willing to splurge on discretionary items.”
Ann E. King, owner of the Underground Railroad Bookstore in Denver, certainly agrees with that. She sells books, calendars, cards, art, and collectibles, items which many experts describe as discretionary.
“It’s the pits,” King says of holiday sales. She wouldn’t offer a projection for her holiday sales, saying only that they will be “very bleak.”
“Collectibles and art used to keep me in the black,” King says. “People don’t have the money to buy them anymore.”
A greater fear among black merchants is that holiday shopping trends this year don’t favor small retailers who can’t offer deep discounts because of narrow profit margins. King, for example, says Wal-Mart can discount books to a price below what she can buy them wholesale.
Barbara Farfan, whose blog is carried on Ask.com’s “Guide to the Retail Industry,” says at least 40% of consumers say sales and price discounts are the most important factors they will use to determine where to shop.
“Things don’t look good. I’m competing against [department] stores that can do 50% and 60% discounts,” says Kim Corbitt, owner of Cat Walk Boutique in Indianapolis.
Corbitt’s store is a medium-priced woman’s clothing store competing with a Nordstrom, Saks Fifth Avenue, Macy’s, Sears and J.C. Penney’s all within a mile’s distance.
“I don’t expect to do better than last year. I don’t expect to see growth. I’m just holding my own,” says Corbitt, whose store opened four years ago.
In addition, one in three consumers say they are cutting back on spending this year.
“I do my best to support African American businesses, especially when the quality is there,” says Vain Strange, an accounting supervisor in Atlanta. “But I am a bargain shopper.”
To get shoppers into her store without slashing prices below what she can afford, Corbitt is having a fashion show down her shop’s catwalk on the day after Thanksgiving, or Black Friday, the traditional start of the holiday shopping season. Corbitt is hoping the event will carry sales forward through December.
To spark interest in supporting black retailers, the Philadelphia chapter of the National Alliance of Market Developers is hosting its seventh annual Buy Black Holiday Shopping Expo on Black Friday.
Norm Bond, NAMD’s director in Philadelphia, expected up to 50 vendors to participate and as many