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The Business of the Christmas Season

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The Business of the Christmas Season

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Commercialism, long criticized, as a distortion of the true celebration of Christmas, has become a crucial profit component for the corporate economy. Very little observation about the religious nature of the holiday rises for reflection. Likewise, even less focus is devoted to the underlying reasons why holiday gifting has become a stable to the season. Heritage and tradition has given way to popular cultural advertisement. A disconnect between purchases of necessity and acquisitions of disposable novelties is the hallmark of the mad rush to buy needless objects.

As long as the psychology of the herd and the guilt of the good parent deem it is an obligation to fork out money that is usually not available, the credit and debt purchases cycle continues. The National Retail Federation is forecasting holiday sales will increase 3.9 percent to $602.1 billion. Yet a consulting firm, commissioned by NRF, projects a reduction in individual spending.

"According to NRF’s holiday consumer spending survey conducted by Prosper Insights & Analytics, the average holiday shopper will spend $737.95 on gifts, décor, greeting cards and more, two percent less than the $752.24 they actually spent last year."

In spite of this pattern, the average holiday shopper is part of a very allusive community. How many people do you know that actually spends this kind of money? If you answer in the affirmative, you might well be in need of shopaholic rehab treatment. The Mad Men on Madison Avenue work for corporate clients. Main street merchants provide the sensible alternative to big box stores. Will you make the switch or are you infected with the ether zone smart phone bug.

Yet, the seemingly attractive cost sensitive pricing and online convenience has increased. Matt Couden writes in the Examiner article, on the rush to buy online.

"A Dec. 3 report from Biz Journals out of San Francisco, notes that Monday’s online shopping was a single-day record, with sales up 19% from last year.

The reports come about online shopping’s success as bad news has hit the retailers with "brick-and-mortar" stores, who saw their first decline in shopping over Black Friday weekend since 2009."

According to the internet retailer, 65% of U.S. shoppers will browse online and buy in store over the holidays as the "line between store and web will further blur this year as 36% of shoppers plan to buy online and pick up in store, and 21% expect to see up-to-date information on product availability on e-commerce sites."

No discussion of seasonal sales can avoid the largest and dominate bell weather of retail. Forbes is reporting that the 2013 -- A Not So Merry Christmas For The Consumer And Retailers?

"Even Wal-Mart reported weak sales last month and shared its view that a challenging environment would persist into the fall. Then this week Wal-Mart announced it was cutting orders to reduce its inventory for the rest of the year. In the company’s commentary there were two key items that don’t bode well for the upcoming holiday shopping season. First, consumers are not spending at the rate predicted by Wal-Mart executives. Second, Wal-Mart isn’t hiring enough workers to keep its shelves stocked. Remember, Wal-Mart is the country’s largest retailer and if it is seeing this problem odds are it is not alone."

All these statistics and trends may seem interesting to a Wall Street analysis or a participant in the chain of product placement. Still, most consumers are not directly employed in the retail industry. Statistics and Facts on the Christmas Season in the U.S., as published by The Statistics Portal indicates.

"Christmas is typically the largest economic stimulus for many nations around the world as sales increase dramatically in almost all retail areas. The United States' retail industry generated about three trillion U.S. dollars during the holidays in 2012. These holiday sales reflected about 19.3 percent of the retail industries total sales that year. As a result, just over 720 thousand employees were hired throughout the United States to compensate for the holiday rush."

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Since the dramatic bulk of sales and certainly the major component of profit, determined by the outcome of Christmas mania, economists are eager to evaluate the results. Fine for the big name outlets, but what about the independent strip store or the local entrepreneur. They risk their entire livelihood, in the hope of steady and consistent sales all year round as their goal. For these folks, the traffic that storms the mega stores is another lost opportunity to keep their enterprise in business.

Small Business Saturday fosters mom-and-pop shopping is the answer. The only way to reverse this terrible trend is to support your local businesses.

"Nationally, market share for local retailers vs. national chains declined from 59% in 1990 to 48% in 2009, according to another Civic Economics study. For bars and restaurants, local market share dipped to 64% from 71%."

Look at retail business from a different perspective. Small business cooperatives are one way for independent retailers to improve their buying power and advertisement placements. While Christmas sales reward specialty boutiques and trendy holiday items, the health and vitality of any business rests upon repeat customers.

Abandon foolish credit purchases, which never make sense. Consider the productive value of infusion monies, normally spent on discarded holiday hype; be directed at buying useful products from within your local community.

You do not have to turn into Scrooge to celebrate Christmas intelligently. An all Amazon delivery that bypasses Santa might save you a few dollars, but a scaled down gifting bazaar bears wholesome fruits, when selectively purchased.

All those acclaimed 720 thousand seasonally part time employees would be much better off with a permanent job. Excessive and binge buying, based upon a cultural holiday pressure to spend, is basically dumb.

Woefully, the business of Christmas is destructive to a sound and stable economy. Consumers squander their hard-earned money cheerfully, because they seek immediate gratification at the cost of lasting happiness. Have a Merry Christmas by accepting Jesus as Lord and Savior.

James Hall – December 25, 2013

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