Consumers in Lehigh Valley and beyond will spend this holiday season – The Morning Call

Owning a store in a town known as Christmas City can give merchants in Bethlehem a slight edge over other areas during the holiday shopping season. However, there is greater reason for optimism for downtown merchants despite the economic issues facing consumers.

Neville Gardner, owner of Donegal Square and the Red Stag Pub and chairman of the Downtown Bethlehem Association, says his retail business has been strong lately and he believes it will remain so.

This was reflected in the National Retail Federation’s Holiday Shopping Forecast, which predicts “healthy” consumer spending over the next two months, despite inflation.

“I sort of agree with them,” Gardner said, noting that his restaurant was understaffed. “Our retail business has been quite strong. Our business is a bit ahead of last year, sort of where we budgeted.

Gardner said Bethlehem’s status should be taken into consideration when considering a spike in business this holiday season: “We may be a bit isolated, maybe we’re a bit ahead on the standard.”

Rebecca Wang, a professor at Lehigh University’s College of Business, said shoppers were returning to stores after battling the COVID-19 pandemic for nearly two years. Local traders are expected to be among those feeling a boost in business.

“People look forward to experiencing the in-store festivities when shopping in person,” Wang said. “Local merchants are expected to experience an increase in income this year as people try to reconnect with their communities. Retailers are also trying to cash in on this sentiment – ​​note that all seasonal decorations have increased coming months. We had Halloween in August and holiday wreaths in October.

“That said, that doesn’t mean consumers are going to mindlessly spend,” she said. “Consumers are now more aware of what they are buying. In other words, consumers are buying, but they also want to stretch their money. »

Strongly branded products will fare better than unbranded items, Wang said. Retailers with competitive offers or interesting niches will be more successful in attracting foot traffic and consumer spending.

Wang said consumers are more than ready to get through this holiday season due to the stress they face from inflation and rising energy costs.

“Although it may seem counterintuitive, one way to deal with stress is to go shopping,” Wang said, “and spending on vacations, in particular, is a satisfying, almost soothing luxury that people have. feeling like you can still afford it right now.Plus, a lot of holiday spending is buying gifts for friends and family, and in times of stress, people want to feel connected.

Wang said the consumer price index showed the price of manufactured goods fell slightly in recent weeks. When combined with other holiday promotions and discounts, “holiday freebies feel like a steal compared to other types of spending.”

The NRF expects sales in November and December to increase 6% to 8% from 2021, to $942.6 billion to $960.4 billion.

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“As consumers feel pressure from inflation and rising prices, and although there is continued stratification with consumer spending and household behavior at different income levels, consumers remain resilient and continue to engage in commerce,” said NRF President and CEO Matthew Shay. A declaration. “In the face of these challenges, many households will supplement their spending with savings and credit to provide a cushion and result in a positive holiday season.”

Still, that’s a smaller increase than last year, when spending rose 13.5% from 2020 to $889.3 billion. Over the past 10 years, sales have seen an average increase of 4.9%, including during the pandemic.

NRF expects online and other non-store sales, which are included in the total, to increase 10% to 12%, to $262.8 billion – $267.6 billion. That figure is up from $238.9 billion last year, which saw extraordinary growth as consumers turned to online shopping to meet their vacation needs during the pandemic. While e-commerce will remain important, households are also expected to return to in-store shopping and a more traditional holiday shopping experience.

“This holiday cycle is anything but typical,” said NRF chief economist Jack Kleinhenz. “NRF’s holiday forecast takes into account a number of factors, but the overall outlook is generally positive as consumer fundamentals continue to support economic activity. Despite record levels of inflation, rising interest rates and low levels of confidence, consumers have been firm in their spending and remain in control.

Gardner of Donegal Square had a ringside seat for this activity.

“We’ve seen that all year long before,” Gardner said.

Morning Call reporter Evan Jones can be reached at [email protected].