MADELEINE BRAND, host:
From the studios of NPR West, this is Day to Day. I'm Madeleine Brand.
ALEX COHEN, host:
And I'm Alex Cohen. Coming up, reading the tea leaves in depressed economic times isn't just a fun pastime, it's also good business for many psychics. We check in with one in New York.
BRAND: But first, President-elect Barack Obama gave his third news conference this week. And today, he said he will have an economic plan ready for the first day he takes office.
President-Elect BARACK OBAMA: I think that when you ultimately look at what this advisory board looks like, you'll say, this is a cross-section of opinion that in some ways reinforces conventional wisdom, in some ways breaks with orthodoxy in all sorts of ways. And that's the kind of discussion that we're going to want. We want ideas from everybody.
COHEN: While he works on those plans, in the more immediate future, things aren't looking too good for holiday sales. Market research group Camasco reports nearly half of those surveyed say they'll buy fewer gifts and that they'll spend less on those gifts.
BRAND: Our holiday tradition here at Day to Day is to check in with retail analyst Howard Davidowitz, and I asked him whether he thinks people are spending less.
Mr. HOWARD DAVIDOWITZ (Chairman, Davidowitz & Associates): That's what we're finding. Retail sales are terrible. The economy is terrible. The country is bailing everybody out. The country's balance sheet looks like Enron's. We're printing money. We're in a mess.
BRAND: We're in a mess. Who's most in a mess in terms of retailers?
Mr. DAVIDOWITZ: Well, the most in a mess are the home furnishing stores, department stores, apparel specialty stores, people who sell discretionary are in a mess. The consumer's in massive trade-down mode and wants a deal.
BRAND: And we've talked on this program before about how well Wal-Mart is doing in this retail climate. Who else is doing well?
Mr. DAVIDOWITZ: Certainly Family Dollar is doing well. Certainly Dollar Tree is doing well. Certainly Costco is doing well. Cash America U.S.A., pawnshops, they're doing well because the consumer can't get credit anywhere else.
BRAND: Did you just say porn or pawn?
Mr. DAVIDOWITZ: Pawn, P-A-W-N.
BRAND: Oh, pawn. OK.
Mr. DAVIDOWITZ: They have 900 pawnshops. It's a public company, and the consumer can't refinance their house, can't get credit, can't get money, can't do anything. So they go to pawnshops and (unintelligible) get advances on their checks and jewelry, and that's happening so that the consumer is in the worst shape since the Great Depression.
BRAND: Wow. So what are you expecting is going to happen on Black Friday?
Mr. DAVIDOWITZ: Well, I expect, when four o'clock in the morning, there'll be lines. There's a massive trade-down effect going on. Stores will have door-busters. Electronics will be the big story. The consumers and the trade-down effect will charge into the stores, buy those door-busters, leave the store, and by the afternoon, it'll be all over. And it won't...
BRAND: And so it...
Mr. DAVIDOWITZ: Move the needle. We're going to have a terrible season. Nothing is - you know, it's not going to mean anything.
BRAND: Yeah. So it'll be a one-day thing, and that's it.
Mr. DAVIDOWITZ: And that's it. It will be over by the afternoon, and retailers will go right on promoting and doing what they have to do to sell what they own.
BRAND: Where should shoppers look to get a good deal, get a bargain? Should they wait for Black Friday? Do they need to wait for Black Friday?
Mr. DAVIDOWITZ: Well, the one advantage of Black Friday is, there will be time-phased promotions. And that is that - to create urgency on the part of the customer, they'll have like a four-hour special.
Personally, I think there'll be better deals as the season wears on and as retailers get more desperate. I think prices go nowhere but down. So, Black Friday, you know, if you're interested in, you know, in an item that's on one of these time-phased deals, that's fine, probably be a great deal. But there'll be more great deals. In other words, the later, the cheaper it gets.
BRAND: And what about Cyber Monday? This is when people go back to work on Monday and look for deals online. Will there be big deals online?
Mr. DAVIDOWITZ: There'll be lots of deals online. I think online shopping helps you tremendously because you can do a lot of price comparison and really focus your shopping. You can look at who's got what deals, and that's very helpful. But I think Cyber Monday will be another day.
Cyber is one of the growth areas of retailing. It's going to have less growth this year than it's had prior years, but it will continue to grow. So this is an area that's a growth area. There'll be lots of great sales, and stores are going to push online sales.
BRAND: And where are the stars in the online world? Which of the retailers are doing well online?
Mr. DAVIDOWITZ: Well, the star is Amazon because they're the biggest player in online. Staples does $6 billion online. They're a pretty good star. You know, Amazon, Staples, they do the biggest jobs online. But, of course, everybody from Sears to Penny's, you know, to Wal-Mart - everybody has sites. The Gap, you know, has sites, and they will be offering online deals, many of them with free delivery, which is very important.
BRAND: Retail analyst Howard Davidowitz. He's chairman of Davidowitz & Associates. It's a retail consulting firm. Thank you very much, Howard.
Mr. DAVIDOWITZ: And thank you, and have a good day.
BRAND: Thank you.