Looking ahead to the holidays

The Great Recession is over according to economists. That’s a good thing because the holiday season is gearing up and we sure want consumers to be in a buying mood, especially when it comes to decorating with flowers.

This recession “officially” lasted 18 months having started in December 2007. The National Bureau of Economic Research’s Business Cycle Dating Committee reported in September that business activity in the U.S. economy hit bottom in June 2009. It was the longest recession since World War II. Even though the economy hit bottom last June, the committee did not indicate that economic conditions have been favorable or that the economy has returned to operating normally. The 14 million unemployed Americans might beg to differ with the committee’s findings as to whether the recession is really over.

Dan Seiver, finance professor at San Diego State University, told USA Today that the announcement that the recession has ended is “going to irritate a lot of people.” He said even though the recession is considered over “doesn’t mean everything is good again…Unemployment tends to be a lagging indicator.”

Primed for sales
But here’s a bit of bright news: The National Retail Federation expects this year’s holiday sales (November and December) to increase 2.3 percent to $447.1 billion. That would be a major improvement over last year’s lethargic 0.4 percent increase and 2008’s dismal 3.9 percent decline in holiday sales.

NRF president and CEO Matthew Shay said “retailers are hoping the holidays bring sustainable economic growth…Companies are closely watching key economic indicators like employment and consumer confidence before getting too optimistic that the recession is behind them.”

NRF chief economist Jack Kleinhenz said consumers will continue to be very conscientious about price. He said the “fundamental shift” in consumer thinking about shopping is causing retailers to offer “significant promotions throughout the holiday season” along with placing more emphasis on value in their marketing efforts.

Another good sign that consumers are spending again are the results of Consumer Reports’ July survey of more than 1,000 women from across the country. Respondents indicated they are more willing to treat themselves compared to a similar survey done in January. Within the past 30 days of when the July survey was conducted, 20 percent of women indicated they had purchased fresh flowers. This was a 7 percent increase over the January results.

dkuack@gie.net