Retailers think you’ll spend $806 this holiday season

SEATTLE - Despite domestic economic growth, weak gasoline prices and unemployment numbers that on the surface seem to approach full employment territory, retailers are sharpening their knives for what promises to be an unspectacular and combative holiday season.

Part of the reason, according to experts, is that worries about the economy refuse to dissipate. A survey by the National Retail Federation estimates households will spend an average of $805.65 during the holiday. While that's the highest amount ever recorded by the survey, it's only ahead of last year by $3.

Experts say these forecasts hide a more complex reality in which some retailers- those who cater to better-off clients, or are so cheap that they provide lots of value- will score big. Meanwhile, retailers that are neither too cheap nor too expensive, might suffer, said Steve Barr, head of retail for PwC, a consultancy.

A sign of the trouble ahead for some retailers is the deep discounts that are being planned. When they advertise 30 to 40 percent off on items early in the season, said Barr, 'That's a very indication they're in a weak position.”

Barr said holiday forecasts also mask a divergence in spending patterns among households, in which wealthy households will spend more, but those making less than $50,000 a year will see a drop-off. Due to slow wage growth, those lower-income families 'still haven't seen any meaningful benefit from the economic recovery.”

Whatever money they save from an extra $500 or $1,000 drop in their gas bill is going to be put to coping with the increasing cost of other items, he says.

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Bellevue Square Mall in the Seattle area is bracing for an onslaught of well-heeled shoppers this year with the opening this month of the 'South Common” space formerly occupied by J.C. Penney, now home to the first Uniqlo in the Seattle area as well as the second Zara in the region. It's also where Whole Foods will open one of its first small-format stores next year.

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Allen Rickert, owner of Top Ten Toys, a two-store independent chain in Seattle, believes he's ready for the holidays. 'My warehouse looks like something out of the Indiana Jones movie,” he said in an interview.

Rickert's company should be one that benefited from economic woes in China: It buys most of its toys there, and the devaluation of the Chinese currency should have made them cheaper.

But since he's a small retailer competing with large importers such as Wal-Mart and Target, he had to place his order with Chinese factories well in advance of his rivals to be sure to receive items on time. It turned out to be too early to benefit from the currency devaluation, which really saw its impact during the summer.

'I was hoping that the currency situation would make for a cheaper year for us,” he said. 'That may come into play next year.”

Some retailers are scoring publicity points by rebelling against the doorbusters that have come to define the season. A move REI announced in October to close its doors on Black Friday (while paying its employees to go have fun outdoors) was widely hailed, and Outdoor Research, another Seattle outdoor-wear manufacturer and retailer, quickly followed suit.

REI's move was paying off early, at least on social media. The retailer's #Opt­Outside campaign has 'dominated” discussions about Black Friday on social media, according to research done by the Salesforce Marketing Cloud team.

Salesforce found 67,000 mentions of REI's decision on social media _ about 10 times as many mentions as other popular brands were getting.