Toy is one of the top sellers in holiday

‘Secret sales’ limit best prices to few consumers

For the Christmas holidays, the sweater will overtake gift cards, top toys may sell out, and discounts are selective, analysts said.

The holiday season’s hottest gift item could be the good old-fashioned sweater as it overtakes gift cards as the top seller.

Some of the most popular toys and clothing styles could be out of stock by mid-December, especially at stores where they’ve been heavily discounted.

And retailers will still use price-cutting to attract consumers. But some of the best sales last only a few hours or are limited to the stores’ best customers.

That’s the view from the experts at BMO Capital Markets, which hosted a “retail roundtable” for reporters Monday.

The group was addressing the U.S. market but said many of the same trends are evident in Canada.

“What we’ve seen from our research is the Canadian consumer is a little bit healthier or steadier than the America consumer. A little more predictable because of the strength of the macro-economy,” said analyst John Morris.

Some of the most popular toys could sell out early as many retailers placed cautious initial orders, hoping to avoid getting stuck with excess inventory, said BMO toy analyst Gerrick Johnson.

Toy makers have stocked additional items in their warehouses to avoid last year’s problem of missing sales because re-orders take so long to fulfil from China, where most toys are made, Johnson said. But there could still be gaps in the timing of deliveries, he warned.

After three years of relatively flat or negative sales, toys are expected to be 3 per cent higher this year, Johnson said. Even though unemployment is still high, consumers are loosening the purse strings, at least for their kids.

Things like Squinkies, Zoobles, Monster High dolls, Disney’s Chuggington train, Bey Blades and Dance Star Mickey are all selling out at times, spurring multiple trips to the toy stores.

“My advice to parents is get out there early. Retailers are light on inventory. We’re seeing sell outs on certain items,” Johnson said. “I’m fairly sure you won’t see the $50 Nerf Blaster, which is $35 off, by mid-December and you’ll have to pay the eBay price or the manufacturer’s suggested retail price.”

In clothing, the sweater is expected to outsell the gift card for the first time in years, the analysts said.

“It’s not a very splashy item,” said Morris, who tracks sales at specialty clothing retailers like the Gap, J Crew and American Eagle. “But consumers are saying gift cards are falling in favour a bit this year. They’re shifting back to more traditional gifts, especially accessories, jewellery and sweaters.”

The “snood” — a kind of circular scarf — is also big, Morris said.

For Black Friday, the day after U.S. Thanksgiving when retailers traditionally kick-start the holiday sales season, price discounting at U.S. discount and department stores will be roughly the same as last year, with outerwear marked down by 40 to 60 per cent and jewellery by 40 to 70 per cent, Hood said.

Black Friday falls on Nov. 27 this year.

Power balance is also very popular.