Holiday retail sales projected to rise in Southern Nevada

With the election over and the traditional holiday shopping season near, analysts are projecting retail sales will jump 3.6 percent nationally, with Southern Nevada likely to mirror that.

The National Retail Federation projects retail sales in November and December, excluding autos, gasoline and restaurants, to grow to $655.8 billion. That’s a bigger jump than last year, when analysts said sales rose 2.5 percent.

“All of the projections are very positive and hover around that 3.6 percent growth rate,” said Melina Cordero, head of national retail research for brokerage firm CBRE, during a Wednesday roundtable. “That’s very positive. It shows the consumer fundamentals building up with wage growth and job growth and enabling consumers to spend.”

Darin Mellott, director of research and analysis for CBRE’s Southwest region, said that because Southern Nevada is dependent on tourism and gaming, the local economy will track the performance of the national economy.

“I would not expect a significant departure from the national numbers in either direction,” Mellott said.

The wildcard is the mood of consumers after the presidential election won by Donald Trump. Cordero said retail sales in the third quarter were lower than expected, and some attribute that to uncertainty about the election.

Consumers weren’t sure what was going to happen and held back on their spending, she said. While job growth and wage growth are important in forecasting retail sales, consumer confidence is a huge factor as well, Cordero said.

“Even when the fundamentals are there and numbers are fine, shocks like this that are unexpected for some consumers can depress spending slightly,” she said. “It could be in some of the big-ticket items like houses and motor vehicles.”

It will take much longer, however, to shape people’s confidence and spending patterns under a Trump administration, Cordero said.

‘BIT OF UNCERTAINTY’

Mellott said that while there’s “a little bit more uncertainty” about the impact of the election results on spending, there’s the potential for increased consumer spending in 2017 if proposed tax cuts and increases in infrastructure and military spending are enacted. That will pump more money into the economy, he said.

“There’s some upside potential to keep an eye on,” Mellott said. “That would be a fairly stimulative policy over the short term depending on how they move through this.”

The National Retail Federation survey said consumers plan to spend an average of $935.58 during the holiday shopping season. Nearly six in 10 plan to buy for themselves, spending an average of $139.61, up 4 percent from last year and marking the second-highest level of personal spending in the survey’s 13-year history.

The group said online sales will increase between 7 and 10 percent over last year, but retail analysts said shopping at malls and regional centers remains strong.

Penny Mendlovic, vice president of retail services for CBRE in Las Vegas, said the growth in local retail over the last five years has been in discount retailers who have relocated to Southern Nevada or added locations.

“Those centers that have a Burlington (Coat Factory), Ross (Dress for Less) and T.J. Maxx are big drivers in our market. We have a lot of consumers that shop at Wal-Mart, and I think that will grow along with online sales. When I am out there showing (retail) space, I see people out there shopping early for the holidays.”

As for what to look for this holiday season, Cordero said retailers will be competing for consumers who order online even a few days before Christmas. They are using ride-hailing services such as Uber and Lyft to complete deliveries, she said.

She said she expects major shopping centers to incorporate more pop-up tenants in their mix. Retailers shouldn’t be surprised if the number of shoppers are down on Black Friday, she said.

There’s so much shopping sales leading up to Black Friday and afterward that there continues to be opportunities for consumers.

“My tip is you can wait until the last minute sometimes because they discount, discount and discount,” Cordero said. “Before long, they are just throwing stuff off the shelves.”