Shoppers in Minnesota and across the nation bought slightly more this holiday season than they did last year. Topping their lists were electronics and other home-related products. Analysts say the impulse to buy such goods gained strength after Sept. 11, when many people appeared to feel that staying close to home was a good idea. The trend was good news for Twin Cities-based retailers Target and Best Buy.
This holiday season brought discounts, and lots of new technology. Jim and Kathy Packer of Mendota Heights were looking for both at a nearby Best Buy store on New Year's Eve. The Packers were admiring high-definition televisions on sale for upwards of $1,500.
Since Sept. 11, that's all we've been doing is having our face plastered to the television, and watching what's going on. And electronics and staying home, is a common thing," Jim Packer said.
The National Retail Federation expected each American family to spend close to $1,000 apiece this holiday season. Much of that, recent numbers show, was spent on electronics, entertainment and other products that could be used at home.
Overall holiday retail sales rose only one to two percent. That was a far lower increase than last year or the year before as Sept. 11 and a slower economy dampened consumer spending. Sales of clothing and high-end merchandise suffered most.
But Steve Roorda, a retail analyst with American Express Financial Advisors in Minneapolis says overall, the holiday shopping season was better than expected. "Over the last two Christmases we have had very, very strong sales. Two years ago sales were up seven percent over the holiday season. Last year they were up five percent. And this year we're going to have sales up one to two percent. So the comparisons were difficult against back-to-back strong Christmases. But I think sales this Christmas came in better than we would have thought 30 days ago. And even great than we would have thought back on Sept. 11th," according to Roorda.
Buzz Anderson, president of the Minnesota Retailers' Association, says it's important to keep this year's small sales gain in perspective. "We have gone through just unprecedented growth over the last seven or eight years. I like to think of it as, if a car is going 200 miles an hour, that's really fast. And if it slows down to 100 miles an hour, it's still pretty darn fast," Anderson said.
For local retailers, it's been an strong holiday shopping season, especially considering the weakness in the economy.
Target Stores have seen strong sales growth as people look for discounts on electronics and entertainment products. Strong results at Target Stores counteracted weaker-than-expected sales at the company's department store chains, Mervyn's and Marshall Field's.
Analysts pin some of the blame for weak clothing sales on the warm fall weather.
Best Buy, based in Eden Prairie, was a prime beneficiary as shoppers upgraded to newer and better technologies for the holidays. Consumers bought DVD players, new video game systems, and as Jim and Kathy Packer might soon purchase, high-definition televisions.
Based on an unscientific survey of his own family's spending patterns this holiday season, Jim Packer offered some amateur investment advice.
"You wouldn't want stock in an airline. And you might want to get into high-definition televisions or things that people would actually use," he said.
Indeed, Best Buy's stock price has risen almost 38 percent since Sept. 11, while the Dow Jones Industrial Index has risen only five percent.