Enticing a Wary Consumer: Special Holiday Edition

News provided by

Mesirow Financial

Nov 08, 2011, 12:56 ET

CHICAGO, Nov. 8, 2011 /PRNewswire/ -- In the November issue of Themes on the Economy®, Chief Economist Diane Swonk writes about two different views of the holiday season: one from the top of the tree, and another looking up a long way from the bottom. View a video in which Swonk explains why: growing wealth and income differentials.

Much like the 2010 holiday season, luxury retailers are expected to ring up tidy profits, but even they will have to be on their toes, offering impeccable service and some attractive deals. Most consumers, however, will be spending carefully at discount retailers and focusing on needs, rather than wants. For more details, Read this month's issue.

  • "A change in corporate compensation packages, which rely more on profits (bonuses) and stock options than labor income" has resulted in the concentration of wealth in very few wealthy households, Swonk noted.
  • "Real, disposable income growth has slowed fairly dramatically over the last year, and is expected to remain relatively weak in the near term. Everything, from dismal employment growth to higher prices at the pump and produce stand, has eaten into income growth," Swonk wrote n her November newsletter.
  • One big ticket item heads some Americans' lists of wants/needs: a new car. "Vehicle sales took a nosedive, and pent-up demand built, after disruptions created by the Japanese earthquake depleted dealer showrooms last spring," remarked Mesirow Financial's chief economist. That means much of November and December retail sales will be focused on new vehicles, not traditional gift items.
  • Main Street trends this holiday season favor online retailers and those offering gift cards. Swonk reasons, "Why drive to your favorite discounter when you can get many items on your gift list just as cheaply (and shipped for free) by staying at home?"  
  • Retailers selling general merchandise and apparel will see only a 1.3% rise in sales, after adjusting for inflation. Even counting the online component, sales will rise a modest 3.2% (again, on an inflation-adjusted basis) this holiday season, according to the chief economist's forecast.  

The November issue of Themes on the Economy® as well as archived issues can be found at mesirowfinancial.com.

Mesirow Financial is a diversified financial services firm headquartered in Chicago. Founded in 1937, it is an independent, employee-owned firm with approximately 1,200 employees globally. With expertise in Investment Management, Global Markets, Insurance Services and Consulting, Mesirow Financial strives to meet the financial needs of institutions, public sector entities, corporations and individuals. For more information about Mesirow Financial, visit its website at mesirowfinancial.com.

SOURCE Mesirow Financial

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