Malls Bracing for Shoppers
Sales are lagging behind projections for retailers across the country, as the U.S. economy shows signs of slowing. But the Grinch is not coming to Los Angeles. Local consumers are spending freely and will keep it up through the holidays, industry observers said.
“The indicators show that L.A., along with New York, are the strongest areas of the country,” said Tom Leiser, director of the UCLA Anderson Forecast. “We would expect the season here to be somewhat stronger than the rest of the nation.”
The New York and L.A. economies are propped up by continued strength of imports and exports and high employment in the entertainment industry. Another factor in the optimism, Leiser said, is that Southern California still is catching up from its late emergence from the lean years of the early ’90s.
Glendale Galleria officials said that Black Friday, the day after Thanksgiving, could be a record-breaker. Last year, some 150,000 people paced the two-floor center. “Based on the way we’ve been trending, we are expecting it to be a blockbuster day,” said Annette Bethers, senior marketing director of the mall.
Bethers said the Galleria has maintained “double-digit increases” in customer traffic through the mall this year vs. 1999. The mall again will provide parking attendants, valets and shuttles from the Los Angeles Zoo to manage the Christmas crush of consumers, she said.
Kate Riggs, a spokeswoman for Century City Shopping Center, echoed the positive outlook.
“There has been a huge surge in retail sales in the area over the last couple of weekends,” Riggs said. “We’re encouraged by that. Gas prices are beginning to go down and people shop during the holidays.”
Economic indicators
Sluggishness in sales of homes and cars, and the limping stock market, are not indications that a slow holiday shopping season is looming, economist Leiser pointed out. That activity does indicate to some extent the spending activity among middle- and upper-income people, Leiser said, but folks at all income levels buy Christmas gifts.
Another indicator of a strong holiday shopping season is that personal income growth in California has been 10.5 percent this year, according to Joseph Magaddino, chairman of the economics department at Cal State Long Beach. That outstrips recent annual growth rates, which have ranged between 7 percent and 9 percent.
The only scenario that could dampen retailers’ rejoicing in the next five weeks would be a serious misadventure in world affairs. Election uncertainty, instability in the Middle East and free-agent ballplayer Alex Rodriguez’s contract demands won’t do it, Magaddino said.
“You can build a scenario for yourself that the world does go to hell,” he said. “You need a lot of things to happen all at once, and that’s unlikely.”
Leiser concurred, suggesting the current drama surrounding the presidential election is inconsequential.
“It’s too early to say whether the political situation will have an effect,” he said. “People probably will look at it, fidget somewhat and figure, ‘It’s going to work out. It won’t affect our jobs.'”
Catharine Dickey, a spokeswoman for mall operator Westfield Corp. Inc., said her employer anticipates shoppers to come out despite peripheral distractions and national economy’s reverse momentum. Westfield operates eight malls in the Los Angeles area, including centers in Eagle Rock, Woodland Hills, West Covina and Fox Hills.
“Given the volatility of gas prices and heating oil and the falling stock market, consumers are still spending,” she said.
Cyber factors
Another wild card for retailers is the Internet. Leiser said shoppers increasingly are turning to e-tailers for holiday gifts. That’s not necessarily bad for the Los Angeles economy, he said, because there are many e-businesses operating in the area.
While economists concurred that a bright holiday shopping season lay ahead, they also agreed that mall operators’ projections of a record-breaking performance may be a bit exaggerated.
“We’re still in a pretty optimistic forecast; it’s just not going to be the same sort of party we had last year,” Magaddino said.
While most malls have similar high expectations, they are taking decidedly different approaches to decking their halls.
Riggs said Century City isn’t planning much for holiday shoppers. The shoppers don’t want it, she said. “We tend not to overburden our shoppers with marketing fluff. We believe the days of window-shopping are long gone,” she said. “Shoppers are on a mission. They know what they want.”
Leave the “fluff” to Beverly Center, where final touches are being put on a multimillion-dollar renovation for holiday shoppers, who’ll be treated to everything from an express elevator to relaxation CDs to promote stress-free shopping, costumes from Ron Howard’s “The Grinch” on display, and a hunky Santa. Yup, a hunky Santa.
Beverly Center officials didn’t want to give too much away, but said part of its “A Santa for Everyone” marketing campaign includes a version without the standard beard and belly. Hunky Santa will appear during the last hour of mall operation on Friday and Saturday nights, beginning Nov. 25.
“He’ll be a real good-looking guy to promote to singles that it’s OK for them to shop on Friday and Saturday nights,” said mall spokeswoman Gerilyn Shorten. “He’ll be decent, I’ll assure you that.”
Allison Mack, spokeswoman for Westfield Shoppingtown Eagle Rock, said that mall has several marketing tactics aimed at holiday shoppers, including early-shopper specials, seasonal tenants and a “Breakfast with Santa” event scheduled for Dec. 16.
