The holiday shopping rush is just around the corner, the most important annual test of retailers' merchandising, marketing and supply-chain muscle. This year, the good news is that, by and large, the consumer economy is solid, and many shoppers are ready to open their wallets.
The bad news? That leaves retailers with few plausible excuses if they don't deliver strong sales results.
There are many signs that shoppers won't be shy about filling their carts this November and December. For one thing, a key barometer of consumer sentiment hit a 13-year high last week.
Meanwhile, the stock market is roaring. The jobless rate is at its lowest level since 2001. And though gas prices have ticked up recently, they still remain well below where they were three or four years ago, a factor that could help low-income shoppers feel flush.
Shoppers generally plan to spend just as much as they did last year, or more, according a survey by consultancy PricewaterhouseCoopers .
All this helps explain why industry observers expect this year's holiday sales growth to match or top last year's 3.6 percent growth from the year before.
In recent years, when retailers have had a bad quarter or a weak holiday season, they've tended to chalk it up, at least in part, to a cautious consumer. The message has been that shoppers are still licking their wounds from the recession, and retailers just can't help it if customers simply aren't ready to spend with abandon.
But it's pretty clear that explanation has hit its expiration date.
It's true that a broad assessment of consumers' health right now would have weak spots. Many workers haven't seen wage increases in a long time. And the stock market rally doesn't particularly help the low- and middle-income households who don't have much, if any, of their wealth parked there.
But you don't have to look too hard across the industry landscape to find stores having little trouble persuading consumers to spend. Sure, big-box electronics retailer HHGregg Inc. liquidated all of its 220 stores this year. But its bigger rival Best Buy Co. Inc. is thriving, its recent earnings results suggesting a durable turnaround has taken hold.
And yes, apparel chains such as The Limited have shuttered their doors, and department stores such as Macy's Inc. are flailing. But T.J. Maxx and Marshalls prove to us quarter after quarter that women are still plenty interested in buying clothes if the styles and price are on point.
Still not convinced? Look at the recent string of monster same-store sales growth figures from the likes of Ulta Beauty Inc. and Aerie, the newcomer lingerie chain owned by American Eagle Outfitters Inc. Note that in its latest earnings report, Home Depot Inc. said it saw a whopping 12.4 percent year-over-year increase in big-ticket transactions, which it defines as those totaling more than $900.
And of course, Amazon.com Inc. continues to gobble up market share, showing consumers aren't hesitating to click "buy" when presented with convenience and wide selection.
If consumers were really so volatile or cautious, then we wouldn't see nearly as many examples of blockbuster growth in the sector.
So, consider this your warning, big retailers: If you don't have a merry Christmas, you've got no one to blame but yourselves.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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