When food retailers give thanks this Thursday, they might want to mention American voters.
holiday season will be better than last year's. Several who were contacted by SN cited the recent election as a reason they feel consumers will spend more freely.
Several retailers also said they are planning to promote more high-margin, prepared foods this year to compensate for aggressive price competition on other items.
"I think we're going to have an excellent holiday season," said Jay Campbell, president and chief executive officer, Associated Grocers of Baton Rouge, La. "I think the election has taken a great deal of concern off the consumer, and I think the easing of fuel costs and energy costs has given people a few more dollars of discretionary income."
Richard Parkinson, president and CEO, Associated Food Stores, Salt Lake City, said he expects holiday sales to be "a little better" than last year "because consumer attitudes seem to be better in terms of the economic environment. Utah was one of the states that was a big supporter of President Bush, and the attitude of people here is fairly positive, so we're looking for a good sell-through."
He estimated sales would increase 1% to 2%, "and given how flat sales have been lately, that would be a good increase."
One of the changes in the company's approach to the holidays this year will be adding entertainment in its store lobbies, Parkinson said, such as a live piano player playing Christmas carols or inviting local school groups to give choral performances.
Bob Piccinini, chairman and CEO, Save Mart Supermarkets, Modesto, Calif., also said he's optimistic.
"I think consumers will spend," he said. "We have an administration set for another four years. The economy -- if you read all national indicators -- appears to be picking up, so I think there is some confidence."
Stew Leonard Jr., president and CEO, Stew Leonard's, Norwalk, Conn., said he feels sales will be strong.
"I think people were holding back a bit before the election," he said. "We see a real good heartbeat. We've got elections behind us, the stock market looks good, and oil prices seem to be coming down a little."
He said this year his company's stores are promoting a lot more prepared items, such as ready-to-cook marinated turkeys for $40.
"So far our pre-ordered cooked turkey sales are the highest they've ever been," he said. "That is a good sign. We see more entertaining."
Marc Jampole, a spokes-man for Penn Traffic, Syracuse, N.Y., expressed a similar opinion.
"I think we are going to have a good holiday season," he said. "People seem to be more involved with families, and when you bring families together, they eat and they have a tendency to eat at home."
The company's seasonal price discount program, called Festive Savings of the Season, offers reduced prices on thousands of items until the end of December. Stores also are advertising Holiday Express, which pledges that at certain designated high-traffic times, stores will keep all checkout lanes open.
High-margin items that Penn Traffic expects to do well are pre-made holiday dinners that customers can order and pick up.
Scott DeGraeve, senior vice president and general manager, Peapod.com, Chicago, a division of Ahold USA, Quincy, Mass., said he expects business to be up this holiday season by about 25% over last year's results.
"I think we're going to have a pretty strong holiday season," he said. "We've set up a focused Thanksgiving holiday center on the Web site, and in some markets, we are offering full ready-made meals -- a complete dinner serving eight to 10 people in a kit. We've had good success with those."
Jack Brown, chairman and CEO, Stater Bros. Markets, Colton, Calif., said it's impossible to compare sales expectations for this year's holiday season with last year's because of the strike-lockout of a year ago.
Stater will be putting a greater effort on service levels, Brown said.
"Because of the impact of the strike-lockout on our business last year, service levels weren't quite up to par," he said. "So we've made a very definite effort this year to emphasize customer service."
According to Brown, Stater will repeat all the basic programs it ran last year, with particular attention focused on its "meals to-go" program in which it promotes turkey, ham and prime-rib dinners. In an effort to get some gross margin during the holidays, Brown said Stater is promoting a program on wine, champagne and spirits in which consumers who buy four bottles get a 10% discount.
Not all analysts were quite as optimistic.
Andrew Wolf, an analyst with BB&T Capital Markets, Richmond, Va., said he expects holiday sales this year to be "decent but not great."
Among the factors that will hold consumers back, he said, are disposable income, "which is still fairly challenged because of the high cost of fuel.
"On the other hand, the consumers' mood is buoyed now that the election is over," he added.
Jonathan Ziegler, principal in PUPS Investment Management, Santa Barbara, Calif., said holiday sales this year should show some modest growth -- "nothing meteoric," he said, "but a better attitude among consumers will mean a better selling season for supermarkets. The economy seems to be better this year, employment looks good and the elections are behind us, and as a result there's reason to expect consumption will be up.
Chuck Cerankosky, an analyst with Key Banc Capital Markets, Cleveland, said he expects holiday sales this year will exceed those of last year "because we've got a better economy that continues to improve, and with the election over, people are feeling better about tax policy and that's another positive. The big issue is disposable income, and the improving economy is generating more disposable income, including more discretionary income for people to spend on gifts, fancier foods and more expensive bottles of wine."
Jason Whitmer, an analyst with Midwest Research, Cleveland, said he expects supermarkets to continue to be price-aggressive through the holidays, "because consumers are still a little reluctant -- not as much as they were six months ago but most have not loosened up yet, and I don't anticipate much change for the holidays."
