Retailers see glum holiday season

Despite lower fuel surcharges and electric power rates, some local retailers say they are bracing for dismal sales this holiday season.

Francisco “Kitz” Barja, general manager of Micronesian Brokers Inc., said the season looks bleak because consumers are saving money due to economic uncertainty.

“We have a feeling because of the economic condition, especially contract workers, they don’t really know what’s going to happen in the future, so they are just saving money. That has an effect on our sales big time,” he said.

Barja said he anticipates sales to be slightly lower than last year’s.

“Sales will still be there, but its not going to be like pre-9/11 or pre-CUC, because consumers are just really tight with their money right now,” he added.

Although power rates have decreased in recent months, they are high enough to shift consumer-buying habits. Consumers are now focusing on buying only essentials, he said.

Consumers have different priorities now, said Jose Tenorio, acting buyer at Joeten Wholesale.

“People are much more tight now with their money,” he said. “They have priorities now with CUC and gas. Before they had priorities with shopping and groceries.”

Tenorio said the company should see their highest sales during the holiday season, but are prepared for a decrease from last year—possibly as high as a double-digit decrease.

On Sunday, Matson Navigation Co. will decrease the fuel surcharge for Guam and the CNMI from 26.5 percent to 21 percent.

Both Tenorio and Barja said the 5 percentage point decrease would not have a large impact.

“It’s only going to be cents,” Barja said of product prices for consumers. “The decreases are very, very minimal. I don’t really see a very big impact on the prices because Matson lowered it a little bit.”

Barja said he has conducted his own analysis of data that shows ocean freight costs have increased 197 percent since 2002, while power has increased by 320 percent for the company, and fleet fuel costs have increased by 236 percent.

“All of these things have brought the prices up, even though Matson has decreased a little,” he said.

Tenorio said the lower freight surcharge helps balance out the cost of power a little bit, but power still accounts for a large chunk of operational costs.

Both Joeten Wholesalers and Micronesian Brokers, Inc. are hoping to keep prices the same, Tenorio and Barja said.

In fact, Barja said Micronesia Brokers, Inc. wants to give consumers a break in December by lowering prices on some popular holidays items, like chocolate and rice.

“We will try to help out the community,” he added.