Home retailers hunt ways to boost end to bad year

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CHARLOTTE, N.C. --- Amid the paint, power tools and 99-piece wrench and ratchet sets, the aisles at The Home Depot are filled this holiday season with wrapping paper, snow villages and artificial Christmas trees.

Customers look at holiday merchandise for sale at a Home Depot store in Charlotte, N.C. Consumers nationwide are forecast to spend only about $94 on home and holiday furnishings this season, according to Deloitte's annual holiday survey.  Associated Press
Associated Press
Customers look at holiday merchandise for sale at a Home Depot store in Charlotte, N.C. Consumers nationwide are forecast to spend only about $94 on home and holiday furnishings this season, according to Deloitte's annual holiday survey.

"I was a little surprised when I walked in," said Alice Yoder, of Charlotte, as she scanned the holiday section of a Home Depot circular for a pre-lit Christmas wreath advertised for $59.99. "I knew Home Depot had a huge selection of lights and trees, but the Santas, and other home dÃcor, that I didn't expect."

The nation's beleaguered home retailers -- stung by declining consumer confidence, slumping home sales, tighter credit standards and rising fuel prices -- are fighting hard to attract Ms. Yoder and others in a last-minute rush of customers to help make up for what's been a tough year.

"Customers still want to feel good about their homes," said Craig Menear, the executive vice president of merchandising for The Home Depot. "We took a bigger swing in holiday items this year because we know that when times are more difficult, consumers want to take care of their homes."

Retailers generally expect this holiday season to be a nail-biter, with most expecting only small gains in sales volumes compared with last year. It's even worse for the home retailers: Consumers nationwide are forecast to spend only around $94 on home and holiday furnishings this season, down from last year's $115, according to Deloitte's annual holiday survey.

"With the rise of gas and home heating prices and the mortgage rate concerns, shoppers anticipate cutting back on many categories, including home," said Wendy Liebmann, the president of marketing consulting firm WSL Strategic Retail. "It's a season of mind-set over matter, as shoppers feel very unsettled about what the year-end will look like for them financially and emotionally."

To compensate, home retailers -- including Macy's Inc., Crate & Barrel, The Home Depot and others -- are offering both new and unique merchandise, plus running special online promotions, along with the traditional in store trim-a-tree wares.

At Pottery Barn, stores are offering holiday decorating classes and special shopping hours, and customers who attend receive a complimentary Pottery Barn design book. At Macy's, a new product launch from Martha Stewart is designed to drive traffic to home departments that didn't exist last holiday season.

Other home retailers started the holiday push early, including The Container Store and Design Within Reach, with direct mail and e-mail offers for affordable small items and unique larger ones.

At The Home Depot's Web site, customers can watch comedian and actor Steve Harvey talk about ways to prepare their home for the holidays, from floor installation to holiday dÃcor. The store's offering is backed with a full marketing campaign, complete with print and electronic media, online and direct mail advertising.

"I went in there for these and clear garbage bags and left with ribbon and some votives," said Katie Varrassi, of Charlotte, as she loaded two rosemary bushes from The Home Depot into the back of her sport utility vehicle. "I left with more than I came for. They were definitely impulse purchases."

This holiday season, many retailers are just trying to get consumers "into their stores, Web sites, as quickly as they can before shoppers become even more timid about shopping," Ms. Liebmann said.

Home retailers could use a strong holiday season. Both The Home Depot and Lowe's Cos. reduced their profit outlooks as they reported declines in third-quarter profits. In mid-November, Williams-Sonoma Inc., which operates Williams-Sonoma brand stores and Pottery Barn, reduced its fourth-quarter earnings projections, citing weak sales in areas of the country that have been hit hardest by the housing slump.


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