Prognosticators can be excused for not knowing what to expect for this year’s all-important fourth quarter.
Quite simply, it’s difficult to predict where you’re going when you’re not even sure where you are.
On the heels of the destruction of Hurricane Sandy, and shortly after an insanely close—and brutally divisive—presidential election, most consumers anxiously await a return to the plain and ordinary--let’s call it the Newest Normal.
The uncharted waters of the Newest Normal are probably best exemplified by the thousands of folks on the East Coast either without power or a home. Even lucky Northeasterners are recovering from weeks with no power. They would certainly welcome any sort of normalcy. How this will affect holiday sales is anyone’s guess.
Before the hurricane, most signs pointed to a solid, if not spectacular, fourth quarter. Most of the major retailers had announced they were adding more part-time employees, compared to last year, as they prepared for a small uptick in holiday sales.
But that was before Sandy. It’s hard to imagine folks on the East Coast carrying through with normal holiday-shopping patterns. If my own experience is any indication, instead of holiday plans, most New Yorkers are discussing what generators receive the best ratings in Consumer Reports.
Meanwhile, the entire nation is in recovery mode from what seemed like a never-ending presidential election. For those in battleground states, it’s ok to turn on your television again.
And for the rest of the country, at least it’s over, right? Not so fast.
Apparently the Newest Normal doesn’t allow for political honeymoons. The day after the election, headlines were barking about CIA conspiracies and fiscal cliffs.
Luckily for the home furnishings industry, American consumers continue to show signs of, well, consuming. Despite years of constant political bickering, and even apocalyptic warnings about the American economy, macro conditions have continued to slowly improve.
When the political mudslinging was at its height in October, the Consumer Confidence Index reached its highest level for the year. New housing sales keep inching upward, while most retailers—with a few notable exceptions—expect slight sales increases for holiday 2012.
J.C. Penney, THE most notable exception, will surely be happy to put 2012 in the rear-view mirror. CEO Ron Johnson has discovered the hard way that eschewing price-cutting sales is not a good strategy during a creaky economy and the Newest Normal.
At the same time, Walmart has warned of weak fourth quarter sales because its shoppers are buying lower-priced goods.
It’s all part of the Newest Normal, where one should expect the unexpected—and prepare for the worst.