Today holds key to holiday sales> Analysts watch consumer spending

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BANGOR – Store owners are anxious to see how many people will turn out and how much they will buy today, traditionally the biggest shopping day of the year. Uncertainty in the stock market and the presidential race, along with high energy costs, have businesses trying to figure out what will be consumers’ intentions this holiday season.

What happens today, too, will determine whether stores need to hire more workers in this still tight labor market.

Fear of the Y2K bug affected some shoppers last year, but that pest eventually came and went with minimal bites. Consumers, though, felt a financial pinch a few weeks after the start of 2000 when heating fuel costs began to match the high prices felt at the gasoline pumps.

Those energy concerns haven’t eased, and that may affect discretionary holiday spending this year, according to analysts. Add to that the ups and downs on the stock market and uncertainty over the next president, and the buzzword this year for shoppers could be conservatism.

“Perhaps they’re not going to spend as much this holiday season as they’ve done in years past,” said Craig Holland, a labor market analyst for the eastern Maine district of the state Department of Labor. “The major thing for them is their day-to-day budget. Their discretionary income is spent” on energy costs.

Spending conservatism because of the high price of energy “would be an interesting effect” that analysts at the State Planning Office have not predicted, said Jim Conners, an SPO energy specialist.

“I think ‘conserve’ in the sense of conserving fuel but not in the sense of conserving dollars,” Conners said. “It’s hard for me to see too many people doing that consciously.”

He said he expects people to spend money, but more wisely than frivolously.

“People might be hanging on to their money a little more tightly,” Conners said.

What profit levels will be among retailers this year is speculative, and many will be reviewing sales figures after stores close today to gauge what the rest of the season will look like financially.

“There’s going to be profits, there’s no question about that,” said Bruce Soper, manager of the Bangor Mall. “But I think people are a little more wary of a lot of things going on.”

Today will not be looked upon as Black Friday as it has been in years past – the day when retailers actually start experiencing a profit for the first time during the entire year. Instead, today will be a bellwether as to how national and regional events will affect retailing.

“It’s kind of a cautious approach, the wait-and-see approach,” Holland said. “[Today] will give us some kind of indication as to what to expect. Obviously you can be mistaken in your projections. But if it’s a good first day, that’s obviously a good sign.”

One occurrence this year, though, could bring comfort to retailers this season. Christmas last year was on a Saturday, and there were 29 shopping days between Thanksgiving and Christmas. This year, because of Leap Day, Christmas is on a Monday. That gives retailers and their customers 31 shopping days, including five weekends.

That “without a doubt” will help sales figures, said J.B. Klecha, manager of J.C. Penney at Bangor Mall. But it also shifts the shopping habits of consumers.

“It changes the sales curve of the way a customer shops,” Klecha said. “It peaks later.”

Stores in the area have been advertising bargain-basement prices on some goods or will be giving away freebies during early morning hours to entice shoppers to spend. This tradition means more this year to the retailers, though, because of the uncertainty enveloping the season.

There’s also uncertainty over whether stores will have enough employees if sales are strong. Throughout the area, storefronts are adorned not only in festive trappings but with placards that have become just as important the last couple of years as ornaments – “help wanted” signs.

The signs may be up, but some retailers are not going to the expense of bringing on new workers until they have a better idea about holiday sales.

“Employers have wanted to see how the season develops before hiring,” Holland said. “They will increase work hours before adding people.”

Soper agreed.

“There’s going to be a fairly generous amount of overtime spread out among a few workers,” he said.

Some stores, however, needed to hire before today instead of taking a wait-and-see approach. With record-setting low unemployment rates in the state, some retailers started seeking employees as early as September.

That’s what Klecha tried to do for J.C. Penney, but he got little response.

At the end of October, “we stepped up to the plate and sweetened the pot,” Klecha said.

Like what many retailers are doing in the tight labor market, Klecha offered pay above minimum wage and included a signing bonus that will be handed out at the end of the season. Generous store discounts on merchandise are another incentive given by retailers.

Smaller businesses, too, are experiencing the pinch of a tight labor market, said Rick Schweikert, owner of the Grasshopper Shop and The Hop in downtown Bangor.

“We certainly have been made aware of the labor problems all around us,” he said. “I have felt the pressure a little bit, but we’re not stuck.”

The anticipated opening of the Discovery Museum, formerly called the Eastern Maine Children’s Museum, is adding momentum to bringing changes in the downtown Bangor area, Schweikert said. The museum was to open at the beginning of December, but that has been delayed until early next year.

That postponement won’t affect holiday sales downtown, which Schweikert said he expects to be up but not record setting this year.

“If the people are going to the museum with their kids, they’re not going to be doing much Christmas shopping,” Schweikert said. “They’ll be buying impulse items. I’m not terribly disappointed.”

Instead, positive changes in the shopping and arts culture downtown, coupled with new stores in the Bangor Mall area, will be “good for the consumer” because there are more choices and price wars among the retailers, Schweikert said.

“There’s more competition, and every store’s going to get a smaller piece of the pie,” he said. “That’s good for the consumer.”