Susan Gordon, Staff Reporter
A Santa Claus doll welcomes shoppers at a store in downtown Kingston early in December. - NORMAN GRINDLEY/DEPUTY CHIEF PHOTOGRAPHER
ECONOMIST DENNIS Chung counts inflation as a key component in the slowdown of business this Christmas.
A small sample of key retailers in the island supports the fears that had been expressed going into the season - there might be a lot of caring this Christmas, but there would not be a lot of cash to back it up. Most stores added an extra hour or two to their opening hours on Saturday night to make up for the loss of an extra shopping day created because Christmas fell on a Sunday this year, but that did not help much.
Pitching the year to date inflation at the end of November 2005, at 16 per cent, Mr. Chung said this was compounded by the fact that the General Consumption Tax (GCT) was raised by 1.5 per cent increase made in July. An early warning to retailers that consumption levels would have slumped this Christmas was the fact that the GCT revenues had slumped below budgeted levels.
Mr. Chung said the effects of hurricanes and demonstrations further slowed productivity and impacted consumption levels. The low business and consumers confidence levels told the tale which is now being confirmed by merchants.
"In comparison to last year the dollar value this year was better, but when you factor in inflation, in real terms I don't see any growth," said Leacroft Small, store manager for MegaMart Wholesale Club in Portmore
"We had more shoppers in the store than last year when I compared the head count...people were coming but the spending weakened," he told Wednesday Business admitting that he expected consumers to spend more.
FEWER SHOPPERS
One popular mid-island pharmacy told Wednesday Business that though it was too early to calculate its performance this Christmas, the store had fewer shoppers this year. "Those people who think the prices would change shopped earlier this year from as early as October," said the pharmacy source.
"We didn't do as well as last year," said general manager for Hi-Lo Supermarkets, Montego Bay, Ewart Jackson. He said this year, the average basket size, referring to the average number of items a consumer would purchase , was approximately one per cent less than last year's.
Grocery items which are normally the major carrier of business for the supermarket still did reasonably well but consumers seemed to have held back on purchasing from the produce section and Christmas lights. Market conditions meant that produce was expensive, thus limiting sales.
"The sale in Christmas light and decorations was pretty poor. It pales in comparison to last year, said Mr. Small of Portmore MegaMart.
"How could retailers have try to beat inflation and get greater returns on business?" Wednesday Business asked. "There was nothing they could have done but to control the cost side of business by not stocking up as much as they did, said Mr. Chung.
