Updated November 23, 2020 - 12:06 pm
Las Vegas resident Napath Harrell says a $400 bottle of perfume is on the top of her holiday wish list this year.
“That’s my splurge gift,” she said of the Baccarat Rouge 540 perfume from luxury fragrance designer Maison Francis Kurkdjian. This year, Harrell will be spending about $5,000 on gifts for friends and family.
Others like, Henderson resident Mikaela Cohen, said she’ll be spending less this year for Christmas.
“It’s been a financially difficult year on all of us, but we’re still managing to get gifts for one another,” she said. “I’ll be purchasing a lot of merchandise and apparel from local breweries for my husband, local bags of coffee and mugs for a few people on my list, as well as some home good type of gifts.”
This holiday shopping season comes at a not-so-festive time for the state’s economy, and many shoppers are feeling the impact.
Less spending ‘not surprising’
U.S. households are expected to spend an average of $1,387 on holiday gifts this year, down 7 percent from last year, according to Deloitte’s 2020 annual holiday survey.
“The lower projected holiday growth this season is not surprising given the state of the economy,” said Daniel Bachman, Deloitte’s U.S. economic forecaster, in a statement.
Nevada’s economy is struggling with a high unemployment rate, and a rising number of COVID-19 cases is contributing to shaky consumer confidence. People are spending less on holiday gifts than prior years and steering clear of crowded one-day, in-person shopping bonanzas, like Black Friday.
Nevada’s 12 percent unemployment rate in October was higher than the national rate of 6.9 percent. State data shows 174,274 Nevadans are receiving unemployment insurance as of Nov. 14, like Cohen.
Cohen was laid off due to COVID-19 in March and hasn’t found a new job.
“With my unemployment running out soon, money is a little tight this year to be spending frivolous amounts on gifts,” she said. Still, Cohen said she plans on spending most of her holiday budget supporting local, small retailers this year.
Not everybody is hurting, though.
Analysts from PricewaterhouseCoopers found that 42 percent of shoppers surveyed will continue to spend the same as last year. The PwC holiday outlook also found that millennial shoppers — those between 25 and 38 years old — will spend the most money this holiday season because “many of them moved home to live with family at the start of the pandemic, while still being employed.”
Sally Rapp, of Las Vegas, said she plans to spend the same for her family this year, about $200 to $500 for each of her kids.
“We’re looking at useful things that they can use when they are camping.”
Bennie Hollis, of Las Vegas, said he’ll be spending more money this year, up $300 from last year, for gifts.
“We’ll be getting power vehicles for the kids, shoes, clothes, typically things,” said Hollis.
The National Retail Federation, the largest retail trade group in the U.S., said shoppers are reversing a trend in previous years with their gift-buying.
“When folks responded to the (NRF) survey, we saw more emphasis on gift purchasing for friends and family, which would reverse a trend that we’ve seen in previous holiday seasons, where folks use Black Friday for the shopping deals as an opportunity to purchase household items or things for themselves,” said Retail Association of Nevada spokesman Bryan Wachter.
Retailers sighed a breath of relief Sunday, when Gov. Steve Sisolak announced no changes for the industry under the statewide pause.
Unlike other industries such as gaming and entertainment, retailers can continue operating at a 50 percent capacity. The move reassured some who were concerned about a statewide shutdown or further limitations on capacity ahead of Black Friday.
Retailers “typically start seeing their first profits of the year” from Black Friday sales, said Wachter. And while big box stores are anticipating less foot traffic this year, fewer shoppers could be the death knell for small mom-and-pop stores.
“Many have taken (Paycheck Protection Program) loans and are trying their hardest to stay alive,” said Wachter. “With COVID, it’s going to be a hard year for many of these stores at a time when so much is stacked against them. A good fourth quarter will allow them to continue in existence.”
Wachter said Wednesday brick-and-mortar retail sales in Nevada are expected to be down anywhere from $100 million to $300 million compared to last year.
Barbara Finkel, owner of Las Vegas Antique Center, said she’s happy to be able to continue welcoming visitors to her antique store on South Decatur Boulevard.
“I’m happy to stay open and monitor the number of people and follow the protocol as required by the science community,” she said.
But as a business owner Finkel is still concerned about whether her business will make it through the holiday season as Nevadans are being urged to stay home.
“I’m hoping to stay afloat,” Finkel said. “I’m realistic about the economy and how COVID affects people’s wallet as opposed to a fear of going out. The economy has affected cash flow and cash flow impacts how people will spend.”
Wachter remained positive that shoppers would increase their spending as many retailers started their holiday promotions last month while offering pickup services.
“Our stores have really been increasing Black Friday sales and the holiday season as early as October,” he said. “We have a lot of confidence that people are choosing curbside and store pickup so we’re not anticipating a lot of traffic in our stores. There are no deals that you’re getting in store that you’re not getting online because folks are trying to reduce their exposure (to COVID-19).”
Bachman, from Deloitte, said high unemployment and economic anxiety will weigh on overall retail sales this holiday season.
But despite the COVID-fueled recession, retailers are helping more customers through the checkout line. October retail sales in the U.S. were up 10.6 percent compared to the same month last year and for the first 10 months of this year, retail sales were up 6.4 percent compared to the first 10 months of 2019, according to research from the retail federation.