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Purdue expert: Retailers may see bleak Christmas

October 2, 2008

Talk about a lump of coal. Purdue University retail expert Richard Feinberg said this morning that retailers might face their worst Christmas season in 15 years.

A best-case scenario would be for sales this year to be 2 percent higher than last year, said Feinberg, who directs the university's Center for Customer-Driven Quality. However, he said, it's just as likely sales will be flat.

The glum prediction was prompted by the sluggish economy, which has pushed Indiana's unemployment rate to 6.4 percent - above the national rate of 6.1 percent. Manufacturing layoffs coupled with high heating and gasoline costs and the global credit crunch will press Hoosier consumers to cut spending, Feinberg said.

Retailers will step up advertising campaigns and in-store promotions, he said. Even so, he said many consumers will forego the mall entirely.

Retailers also will lean heavily on low-cost e-mail marketing to proven customers, which he said likely will help push Web shopping up 10 percent.

Retailers will cut costs by trimming inventories. The resulting tight supplies mean consumers will be challenged to find the exact items they want, particularly in the proper colors and sizes.

So if you see little Ralphie's Red Ryder BB gun with the compass in the stock glistening on the shelf, snatch it before it's gone.

"If consumers can find what they want, they should buy it and not wait," Feinberg said.

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