'Tis the Season for 'Christmas Creep'

It's only October, but evidence of the upcoming holiday season is already appearing in stores. Bill Cody talks with Liane Hansen about the phenomenon known as "Christmas Creep" and whether it has any impact on consumer spending.

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LIANE HANSEN, host:

It's only the end of October, but in some retail stores it's been beginning to look a lot like Christmas. Economists at the Wharton School at the University of Pennsylvania call this phenomenon Christmas Creep.

Bill Cody, managing director of the Baker Retailing Initiative at Wharton, is in the studios of WHYY in Philadelphia to explain.

Hi, Mr. Cody.

Mr. BILL CODY (Wharton School): Hello.

HANSEN: First of all, why is Christmas merchandise showing up before Halloween?

Mr. CODY: I think for the most part it's a very important season for retailers. And they've found that people may complain about seeing Christmas things in the store in October, but the fact of the matter is, is that they're buying it. So they're seeing the impact at the cash register. And for retail that's really the most important thing.

HANSEN: Is it important that they're buying it full price? It's not like sale price right now. Right?

Mr. CODY: Exactly. Part of it is an image. If you're coming out with something that's unique, and you really want to make a statement on price for the season, you're going to sell it at full price in October and hopefully through November.

I think the other thing is very psychological for the consumer, is they like to focus on impulse purchases. And most impulse purchases are fairly profitable for retailers. So early in the season, if you see something that you like that's related to Christmas, chances are you might buy it on impulse as opposed to waiting for a sale.

HANSEN: Yeah, but couldn't it also have a negative effect? I mean, people saying, I can't believe they're putting this stuff out now.

Mr. CODY: I think there is some backlash. I think to retailers' credit, they're not playing the Christmas carols before Halloween. And I think if they heard the music, that would really put people in a bad mood.

HANSEN: Does this really add to profits?

Mr. CODY: I would say it's sort of a hedge on the perspective of retailers. For better for worse, they train consumers to wait towards the end of the season to get the great deals. And now they're taking another look at the season and saying, well, there might be some people who may prefer to purchase early, so let's start to bring some of the merchandise out earlier and earlier to get those people who may be willing to pay at full price and who really don't want to battle the crowds that come either right after Thanksgiving or as you get closer to the holiday.

HANSEN: Do you think that at the rate this is going, we're really going to see Christmas in July?

Mr. CODY: Well, I know in the U.K., Harrods rolled out their Christmas store in the beginning of August. So at least in the U.K., you may be on the precipice of that. But I don't see anything in the U.S., at least with the mainstream retailers, that that will happen.

HANSEN: Bill Cody is the managing director of the Baker Retailing Initiative at the University of Pennsylvania's Wharton School in Philadelphia.

Thanks a lot.

Mr. CODY: Thank you.

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