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Blue Christmas on the horizon for Florida's retailers?

By David Sedore, Palm Beach Business.com

DELRAY BEACH — Christmas is still nearly three months away, but the Tuesday’s consumer confidence report from the University of Florida won’t bring much cheer to the Sunshine State’s retailers as it portends a rather slow holiday shopping season.

Confidence among Florida’s consumers did rise September but mostly because last month’s finding was so low that a rebound was almost inevitable. A separate report  also released Tuesday found consumer confidence nationally essentially remaining flat  compared to August. .

The UF’s consumer confidence index rose three points to 64 as long-term expectations for the economy increased. That’s not much above the index’s all-time low of 59 set in June 2008. The Conference Board’s national consumer confidence index rose to 45.4 from 45.2 in August.

“It is not surprising that confidence rose this month as we get further from the debt-ceiling debate,” said Chris McCarty, director of the UF survey.  “Confidence actually rose this month among both younger and older respondents,  although it is still at historically low levels.  Seniors, who were the source of much of the decline last month, are increasingly pessimistic about the economy in both the short and long run.  For those 60 and over expectations of U.S. economic conditions over the next year are at a record low of 45.  Their expectations of the economy over the next five years are near record lows.

“The effect of this on the Florida economy would depend on the sector.  Overall those aged
25-55 are responsible for most consumption in total dollars, although for some sectors, such as health care, seniors consume more.”

Said Lynn Franco of the Conference Board: “The pessimism that shrouded consumers last month has spilled over into September. Consumer expectations, which had plummeted in August, posted a marginal gain. However, consumers expressed greater concern about their expected earnings, a sign that does not bode well for spending. In addition, consumers’ assessment of current conditions declined for the fifth consecutive month, a sign that the economic environment remains weak.”

McCarty said  this month’s gain in confidence reflects more of a rebound from a particularly low month rather than a turning point for the economy and consumers. And that could be bad news for retailers.

“Around this time of year we start to think about the holiday retail season, which is traditionally responsible for more than a third of annual sales in less than two months,” said McCarty.   “Forecasts so far are lower than for last year, and with consumer confidence at low levels for virtually all types of respondents holiday shopping may be subdued.  Temporary holiday hiring is also expected to be lower this season.”