Holiday sales growth may slow

Economists predict strong sales for local retailers this holiday season, but the growth will be weaker than in years past because of a cooling real-estate market, higher gas prices and higher interest rates.

Many Newport-Mesa stores will open at dawn for what promises every year to be one of the biggest shopping days of the year. Retailers call it Black Friday because it’s the beginning of a busy holiday season they hope will bring them to profitability.

It’s annually one of the busiest shopping days, but it has been surpassed in recent years by Christmas eve and the day after Christmas.

Consumer confidence was buoyed in past years by the swelling real estate market.

“The last few years, home prices have been appreciating, which creates an economic quality called the wealth effect,” said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange.

“Once you feel wealthy, you spend a little more. Although you are not planning on selling the house, the feeling is positive.”

This year, the stagnant, or in some cases dipping, home prices may be a reason people are not in the same spending mode as they were last year.

But the results may be skewed, Adibi said

“Another phenomena … we have witnessed the last few Christmas seasons is people buying more gift cards,” he said.

“Gift cards are not really registered as spending until they’re actually spent.”

South Coast Plaza and Fashion Island launched separate gift-card programs in September, and both report healthy sales.

“Our customers are very receptive to the new gift card,” South Coast Plaza spokeswoman Debra Gunn Downing said Wednesday.

“We’re running considerably ahead of last year … and we anticipate that we’ll do well this holiday season.”

Despite the economists’ predictions for holiday-season sales, customers at Newport-Mesa’s biggest shopping centers aren’t necessarily feeling the same money crunch that other areas might experience.

But the affluency of the general population of Newport-Mesa is taken into consideration when the numbers are crunched, said Tony Cherbak, chief operating officer in the Costa Mesa office of Resources Global Professionals, a professional services firm.

“It’s clearly a more affluent community, say, than others across the country, but it’s relative to the stores,” Cherbak said. “I would say, yes, [shoppers will] spend more in the absolute amount of dollars.”

South Coast Plaza and Fashion Island representatives expect robust sales today and throughout the holidays.

Both centers continue to attract stores that are unique to Orange County and even the West Coast, like Fashion Island’s American Rag Cie and South Coast Plaza’s Fresh.

And although the Newport-Mesa population may be able to spend at these more expensive boutiques, Cherbak said regardless of income bracket, everybody loves a bargain, so stores like Costa Mesa’s Target will, in terms of percentages, fare as well as high-end specialty stores.

Newport Beach resident Allison Pence said she’s planning on spending the same amount of money on holiday shopping as she did last year.

She won’t be doing it by saving at post-Thanksgiving Day sales, though. Pence said she won’t brave the crowds because she’ll be busy with her family.

“I just want to be with my family,” she said as she got some shopping done at Fashion Island on Wednesday. “Shopping isn’t the priority.”

If people are spending less, it doesn’t seem like rising energy prices are fueling their discretion.

Santa Ana residents Jay and Ann Hathorn said they’ll probably spend less than they did last year on Christmas gifts because they think they topped out last year on spending.

“We’ll spend a lot less, definitely,” Ann Hathorn said. “I think we peaked last year.”

Unlike Pence, who will stay at home to be with her family, Jay Hathorn said he usually spends quality time at stores the Friday after Thanksgiving, although he said he won’t be going this year. Almost every year, Hathorn usually spends some together-time with his daughter, who has to work Friday, shopping and elbowing through the crowds as early as 5 a.m.

“They always have a blast, but you won’t find me here,” said his wife Ann Hathorn as the couple perused the shops at South Coast Plaza on Wednesday.

Tustin Ranch residents Gregg Daukert and Suzanne Lowenthal said they expect to spend even more money than last year.

“We have a teenager, and everything is more expensive,” Lowenthal said as they rested during a shopping trip to South Coast Plaza.

People are still spending in Orange County, but there is another factor to account for the slightly weaker growth percentage. E-commerce continues to rise in popularity, Adibi said, and that also takes a toll on bricks-and-mortar retail.

“There are more purchases done on the Internet rather than people going to the brick-and-mortar stores,” Adibi said. “Again, people are going to spend, but just not necessarily in Orange County.”

Fashion Island spokeswoman Laura Davis said the shopping center’s retailers aren’t worried about drooping sales because of E-commerce. Gunn Downing agreed.

“People want to touch and feel their product, and to go out and personally get a gift for their friend or family,” Davis said.

“It’s a little more personal when you go out and pick up something for somebody.”

South Coast Plaza and Fashion Island have extra staff on hand today to help make shopping go as smoothly as possible.