Season of spending gets an early start

Holiday shoppers aren’t waiting for Thanksgiving weekend.

Sunday morning, they were lined up by the hundreds for the newest Nintendo offering, the $250 Wii. On Friday, Sony’s PlayStation 3 was the hot item at a list price of $599. It had buyers elbowing -- and in some cases fighting -- to get them.

The competing video game consoles debuted just after midnight two days apart, and they quickly sold out -- at least temporarily -- within hours.

“There was a lot of excitement for both of them,” said Ian Lewis, a sales supervisor at a Best Buy store in Signal Hill, where shoppers queued up by the hundreds.

And this week, the midnight madness continues. Forget about waiting for the 6 a.m. specials the day after Thanksgiving. Stores including KB Toys and Toys R Us and several outlet malls across Southern California open at 12:01 a.m. Friday.

“My sense is that people are going to go shopping right after finishing Thanksgiving dinner Thursday night,” said Al Frank, who runs the Los Angeles consumer services group for Deloitte & Touche.

Big and small, the merchants are ready. At Mountain Rose Gifts, a small home decorations store in Montrose, owner Dale Dawson started displaying miniature snow-glazed Christmas trees and smiling ceramic snowmen before Halloween.

This year, he’s had more customers and bigger sales. And he’s counting on the trend continuing.

“Gas prices are down, the stock market is up, the election is over -- I think it’s going to be a good year,” said Dawson, who said that 60% of his sales happen at the tail end of the year. “We’re having some good business already.”

Consumers are feeling a bit jollier this holiday season than Main Street and Wall Street might have expected. When gas prices surged and home sales fell earlier in the year, economists and retailers worried that shoppers would stay home and count their pennies.

Since then, however, fuel prices have leveled off and consumers have kept going to the stores.

“It’s been a surprisingly good year, given all the concerns we’ve had,” said Michael Niemira, chief economist for the International Council of Shopping Centers. “We simply have not had the pullback in spending that we thought would have been in the numbers six months ago.”

The average consumer plans to spend nearly $900 during the holidays, including $791.10 on gifts, flowers, decorations, greeting cards, postage and food related to the holidays, up from $738.11 last year, according to the National Retail Federation.

Aja Southern, 28, buys mostly clothing as gifts and is expecting to spend big this year on her 11-year-old niece, who looks to her for fashion advice. Southern has just become a lawyer, and she plans to shop at more-upscale stores this year.

“I’ll definitely spend more this year,” she said. “I put the fashion into my family.”

To entice early shoppers, Beverly Center installed its snow-globe decorations earlier than usual and is adding an entourage of Candy Cane Girls to sit with the center’s Hunky Santa, who is a buffer, younger version of St. Nick.

Glendale resident Marie Soriano, 40, was considering braving the traffic and crowds of the busy shopping weekend to help her stick to her strict holiday budget this year.

“You do usually find some good deals the day after Thanksgiving,” she said.

Soriano is building a financial planning practice and keeps close track of her spending -- this year she’ll spend $250 for gifts, less than last year because she’s building a business. She said her clients were spending less this year because they were worried that a slumping housing market might foreshadow problems with the economy.

Some homeowners’ fears about the housing market may be allayed. October housing data suggested that the real estate market here might be stabilizing. Home prices were unchanged from September and October, and new-home sales, though down 22%, showed the smallest rate of decline in four months.

Many consumers also have been buoyed by rising personal income, Niemira said.

Although the season will be good for retailers, most analysts say the best-case scenario is that total sales will grow by about as much as they did last year.

The shopping-center group anticipates a 3.5% gain in retail sales from November to January in stores open at least a year, compared with 4.1% a year ago. January has become more important because of the increasing popularity of gift cards, which are redeemed mostly after the first of the year.

In all, the group said, retail sales for that period, which includes new stores, are expected to rise 5.4% this year, for a total of $335.5 billion. Sales last year gained 6%, reaching $318.3 billion. A disproportionately large share of the retail industry’s business comes during the holiday season -- just over 27% of sales and about a third of profits.

In Southern California, which was harder hit than the rest of the country this year by soaring gas prices and falling home sales, shoppers expect to rein in spending a bit more than elsewhere.

Nonetheless, in a consumer survey completed this fall, Deloitte & Touche found that 91% of Southern Californians said that a change in the value of their home would not affect holiday spending, almost even with sentiments of consumers across the country.

Three-fourths of people here said they felt secure about their jobs, compared with 82% nationally. And 65% of shoppers here said they expected the economy to improve or stay the same in 2007, compared with 68% nationwide.

That bodes well for retailers this season.

Jan Seabold, who owns a gift shop in Montrose, says there’s no such thing as a holiday season that starts too early. Customers love to see holiday decorations in her store, she said, although she’ll wait to play Christmas music until after Thanksgiving.

“It’s going to be better than last year,” she said. “It feels good already.”

Frank of Deloitte & Touche said he believed the mood here had gotten even better since his group’s survey was completed.

“Compared to where we thought we were going to be four or five months ago, my clients are euphoric,” Frank said. “People were worried and very concerned about the holidays, but in the last three or four months, I think people’s moods have gotten a lot better.”

It’s more than just retailers who are gauging shoppers’ moods. Consumer spending fuels about 70% of the nation’s economy, nationally and locally.

In Los Angeles, Orange, Riverside, San Bernardino and Ventura counties, consumers drive the region’s $756-billion regional gross domestic product, said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. About two-thirds of that is powered by shoppers’ buying, he said.

In the five counties, retail jobs account for about 11% of the more than 7 million nonfarm jobs, according to data from the California Employment Development Department.

To ensure their share of the holiday dollars, retailers have kicked off holiday promotions earlier than ever.

A sales slump at Wal-Mart Stores Inc. prompted the world’s largest retailer to cut prices on hundreds of toys, electronics and home appliances -- even before Halloween -- setting competitors including Target Corp. and others on a mad scurry to keep pace.

Online retailers, meanwhile, are promoting what they call Cyber Monday. That’s the day after the long weekend, when Web sellers hope shoppers will take advantage of their offices’ high-speed Internet connections to buy on the Internet.

This fall department stores and other higher-end retailers have trumped the discounters. That’s in part because some lower-income consumers have traded up, analysts said.

Others on the economic margins have not been able to benefit from rising personal incomes that have boosted wealthier consumers.

Cecilia Rojas, 61, works in the Macy’s at the Glendale Galleria. She said that she and her four children decided that they were going to spend less this year.

She said that though rent, gas and food prices were rising, her salary hadn’t kept up.

Last year family members gave each other cellphones, computers, televisions and expensive jewelry. Rojas splurged on an Xbox for her grandsons.

“We’re not going to do it like last year,” she said.

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abigail.goldman@latimes.com

alana.semuels@latimes.com

Staff writer Kim Christensen contributed to this report.

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Open wallets

Holiday shoppers will spend an estimated $335.5 billion this year, up 5.4% from 2005. They’re expected to do most of their spending in general-merchandise stores, followed by clothing stores; online and by mail order; consumer electronics stores; and book, hobby and sporting-goods stores.

2006 forecast (Nov.-Jan., in billions)

Electronic shopping and mail order - $33.5

Clothing and accessory stores - $65.0

Sporting goods, hobby, book and music stores - $27.2

General-merchandise stores - $164.0

Electronics and appliance stores - $54.0

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Sources: U.S. Department of Commerce; ICSC Research