Even As Holiday Sales Increase, Retailers Worry Retail hiring is up this holiday season, at least compared with last year. And numbers released this week show that retail sales rose in November, too. But in spite of the good news, merchants remain worried about holiday shopping — they can't get a read on the mood of their customers.
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Even As Holiday Sales Increase, Retailers Worry

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Even As Holiday Sales Increase, Retailers Worry

Even As Holiday Sales Increase, Retailers Worry

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SCOTT SIMON, host:

You are listening to WEEKEND EDITION from NPR News.

Retail hiring is up this holiday season, at least compared with last year. Numbers released yesterday show that retail sales rose in November. Still, merchants are worried about the mood of their customers during this holiday season.

NPR's Sam Sanders visited some retail stores in Washington, D.C., to see if shopkeepers still have hopes for a jolly Christmas.

SAM SANDERS: The Labor Department says store hiring was pretty good in November. It was up more than the third over last year. That's when the U.S. economy seemed to be heading towards collapse. And another government report shows sales ticked up, too. Still...

Mr. DEXTER HOWELL (Owner, GreenPets): No one's real bright about the future after Christmas. You know, there isn't really good news coming out, other than they were - the holiday hiring was up.

SANDERS: That's Dexter Howell from GreenPets, an all-natural and organic pet store. His outlook for the holiday season and beyond is bleak, even though his store added two seasonal employees.

Mr. HOWELL: I don't think anyone sees anything changing in the next six months. I really don't.

SANDERS: The retail data suggests Howell shouldn't be quite so gloomy. November's sales were up 1.3 percent, according to the Commerce Department. A lot of that growth came from car and gasoline sales, but even without those, sales were up slightly. Still, analysts say they understand retailers' wariness as they come out of this brutal recession. They're hoping for good news, but they know their customers have taken a beating.

Mr. NIGEL GAULT (Retail Analyst, IHS Global Insight): I think this particular recession was a rather different one, particularly for the retail sector - will be one where confidence only comes back very gradually, and more gradually than in the past.

SANDERS: That's Nigel Gault, a retail analyst with IHS Global Insight, a forecasting firm. He says merchants are hoping their customers will suddenly open their wallets, and consumers are hoping the stores will slash prices even more.

Mr. GAULT: We do, at the moment, have a little bit of a game of chicken, where the consumers are holding out for bigger discounts, and the retailers are hoping that the consumers are going to come back and start spending before they have to put in the huge discounts. And clearly, you know, the middle part of December that we're entering, right now, I think is going to be critical.

SANDERS: This time may be critical, but it's not a very merry one. Stressed-out retailers say their bargain-hungry customers just aren't that much fun.

Mr. STEVE COHEN (Owner, Lane's Luggage): They're not happy. I mean, normally during Christmastime, people are happy and laughing and joking. And even last year, I noticed that around Christmas people usually come in from parties and they've had a little bit to drink and they're - you're just having a ball. That didn't exist last year � and it hasn't - certainly hasn't started yet this year.

SANDERS: That's Steve Cohen, the owner of Lane's Luggage. He's so worried about customers holding back that he's cut hours for his staff of five. He's also decreased inventory. But he is trying to remain optimistic.

Mr. COHEN: I'm hopeful. I mean, I just don't know anymore. I can't predict who's going to come through our door and what they want.

SANDERS: Who walks through that door this weekend and next could well determine whether this holiday season starts a retail rebound in 2010.

Sam Sanders, NPR News.

SIMON: This is NPR News.

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