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Downtown Merchants Hope for Glad Tidings

By Ed Moosbrugger

November 17 -- Many signs pointed to a healthy sales outlook for Downtown Santa Monica retailers as the peak November/December holiday shopping season approached.

Gas prices were falling. The stock market was at record high levels. Retail sales in September were better than expected.

Jobs increased. A national retail group was predicting a better than average holiday season.

This was in sharp contrast to a year ago, when retailers were concerned about the impact on consumer confidence of soaring gas prices and major disasters around the world. Some of the fears proved to be unfounded.

Some Downtown retailers reflect the generally optimistic outlook this year.

“I think it’s going to be a good Christmas,” said Jay Demircift, president of Puzzle Zoo, which has a store on the Third Street Promenade. “I have bought accordingly.”

Demircift bases his holiday expectations on how things have gone so far this year.

“It’s been very good, up from last year,” he said. Sales are up even though the store is smaller, because Puzzle Zoo has rented part of its space to a hat store.

Ron Baron, owner of Candy Baron on Santa Monica Boulevard, also expects a good holiday season. He cited favorable economic factors, including stable interest rates, a rising stock market and falling gas prices, and he believes consumers are spending more.

He thinks all his stores (he has six) will have a very good holiday season. To help stimulate business, he is putting some gift items in the stores.

Although the Santa Monica store is Baron’s smallest, he is “very happy” with business. “We are doing very well,” Baron said. “We are up from last year.”

Adamm Gritlefeld, owner of Adamm’s Stained Glass & Gallery on 4th Street, said it is hard to predict Christmas business because shoppers seem to be buying later and later each year. But, he said “It all seems to work out and sales go up.”

Part of the retail end of Gritlefeld’s has been slow for a few months, but the most expensive items are selling well, as is the stained glass business.

“There are lots of tourists from out of the country shipping all around the world,” Gritlefeld said.

Although prospects look good for this holiday season, sales increases may not quite match last year’s gains. And there are some negatives, such as the slowing housing market, which could affect consumer attitudes.

The National Retail Federation (NRF) predicts that holiday retail sales (November and December) will rise 5.0 percent this year compared with an increase of 6.1 percent last year. Over the past 10 years, sales growth has averaged 4.6 percent.

The forecast for “subdued holiday gains” was released in mid September, before some of the favorable factors, such as falling gas prices and record stock prices, had kicked in fully.

“Consumers have faced a number of economic challenges this year and have taken them in stride,” said NRF Chief Economist Rosalind Wells in releasing the forecast. “Although sales gains will not be as robust as last year, retailers can still expect above-average sales growth.”

NRF reported that retail sales rose 6.3 percent in September from a year earlier, which is more than the trade association had expected. (The sales figures exclude automobiles, gas stations and restaurants.)

The sales gains were led by clothing and clothing accessories stores, which were up 11.9 percent from a year earlier. That’s good news for Downtown Santa Monica, with its heavy concentration of apparel stores.

Other categories showing strong gains included sporting goods, book, hobby and music stores, which are well represented Downtown.

A NRF report on shopping expectations shows why retailers look forward eagerly to the last two months of the year.

The average consumer expects to spend about $791 this holiday season, up from about $738 last year, on everything from gifts to decorations. They also will take advantage of sales and discounts during the holiday season to spend an additional $99 on themselves.

SANTA MONICA was one of the few places in Los Angeles County to post an increased hotel occupancy rate during the peak summer month of August, according to a report from PKF Consulting.

Santa Monica’s hotel occupancy rate in August rose 1.8 percent from a year earlier to 91.9 percent. Meanwhile, Los Angeles County dipped 1.4 percent to 82.9 percent. Only three of 16 submarkets in the county tracked by PKF showed increased occupancy rates.

For the first eight months of 2006, Santa Monica’s hotel occupancy rate rose 4.4 percent to 84.3 percent. Its average room rate increased 8.9 percent to $257.15 among hotels surveyed by PKF.





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