For many, the appearance of “Big Santa” atop Ala Moana Center in Honolulu signals the start of the holiday retail season, along with the joy of buying and giving.
Shopping malls already have decorated for the holidays and lined up Santas for family photos in anticipation of the usual burst of spending on Black Friday, which traditionally takes place the day after Thanksgiving but now starts as much as a month earlier.
But expectations for this year’s holiday bonanza are tempered by uncertainty over inflation, the Trump administration’s fluctuating tariff policies, job cuts and especially the federal workers who are missing their paychecks due to the longest federal government shutdown in U.S. history.
For Hawaii retailers, the timing could not have been worse.
“We’re always hopeful and optimistic for the future,” said Kea Haverly, incoming chair of Retail Merchants of Hawaii, which advocates for the industry. “But things are dire when that amount of revenue is not cycling through the economy. So ending the shutdown as quickly as possible and getting government back open would be key.”
A shutdown that lasts through Black Friday would be particularly painful, he said.
There’s been chaos over the interruption of SNAP benefits for more than 160,000 local residents struggling to feed their families. Tourism also has taken a hit over the past few quarters, Haverly said, and that, too, will affect retail sales in the islands.
Adding to Hawaii’s woes, the Federal Aviation Administration has begun implementing a phased 10% reduction in air traffic at 40 of the nation’s busiest airports, including Honolulu’s Daniel K. Inouye International Airport, due to a shortage of air traffic controllers.
Is Santa coming?
Ann Jones, a working mother from Honolulu, said she is putting off holiday shopping because of the shutdown. Jones is a medical support assistant in the OB/GYN department at Tripler Army Medical Center who has been working without pay.
“I mean, I thought it would only last 30 days,” she said. “Rent’s due, credit card bills are due, medical bills for my son are due, and more bills are coming.”
Jones wanted to get her son, who has special needs, a tricycle for Christmas but wonders if she will have to tell him, “Santa’s not going to be here this year.”
As the shutdown drags into its second month, the focus is on getting food and paying the bills, said Jones, who is trying to get a loan to survive the shutdown.
“Shopping can wait,” she said.
One bright spot is that her supervisors have been sympathetic toward her situation and asked what she and other employees need. Community food distributions also have been helpful.
Haverly said retailers understand that nonessential purchases fall by the wayside when consumer focus shifts to survival, and businesses have started to adapt.
“A lot of our retailers have been shifting toward discounts — any form of discounts that seem to be applicable — to move the needle in terms of sales,” he said.
The National Retail Federation nevertheless released an optimistic annual holiday forecast Thursday, predicting sales this month and next will grow between 3.7% and 4.2% over 2024 numbers, which translates to total spending of a record $1.01 trillion to $1.02 trillion.
Last year’s holiday sales rose 4.3% over 2023.
“American consumers may be cautious in sentiment, yet remain fundamentally strong and continue to drive U.S. economic activity,” said NRF President and CEO Matthew Shay in a news release. “We remain bullish about the holiday shopping season and expect that consumers will continue to seek savings in nonessential categories to be able to spend on gifts for loved ones.”
Shay acknowledged during a news conference Thursday that American consumers and retailers have faced heightened political and economic uncertainty over the past year. But as one CEO put it, he said, “Somehow, every year, Santa always comes.”
He added, “And I think that really captures the way the holiday season goes. People save for it, they plan for it, they prioritize it, and we think that that’s going to happen again this year.”
Hawaii feels the pain
Hawaii economist Paul Brewbaker of TZ Economics was less optimistic. Sure, people will still want to buy gifts, he said, but the question is to what extent can they.
“‘Bullish’ seems a little over-enthusiastic,” he said. “I’m not trying to be a Debbie Downer here. I just think it’s important to be realistic about, like, is AI (artificial intelligence) going to take your job? That’s the kind of environment we’re in right now.”
This holiday season is fraught with risks for retailers, he said, particularly with consumers experiencing diminished purchasing power. That includes federal workers who are not getting paid, those whose jobs have been cut and residents who are spending a larger chunk of their salaries on groceries.
Brewbaker said credit and debit card data show Hawaii residents are spending higher amounts at grocery stores, which means they have less to spend in other retail channels.
Additionally, although tariffs on imported goods haven’t appeared to have broadly affected consumer prices, Brewbaker said they remain a lingering threat.
Finance company WalletHub ranks Hawaii as the state most affected by the government shutdown, behind only the District of Columbia.
WalletHub attributed the high ranking largely to the large portion of federal workers in Hawaii and a robust real estate market affected by delays in mortgage processing at federal agencies.
The estimated 35,000 federal workers in Hawaii, who represent about 5.5% of the state’s workforce, are either on furlough or required to work without pay during the shutdown, according to the White House Council of Economic Advisers. That figure does not include the approximately 45,000 active-duty military personnel stationed in the islands, primarily on Oahu. There are also workers affected by federal contracts.
The council estimates a loss of $349 million in consumer spending per month in Hawaii as a result of lost federal wages and reduced federal contract spending.
Enticing consumers
Hawaii’s malls and retailers are nevertheless putting forth their best efforts, rolling out holiday decor and specials in hopes of bringing customers in the door.
Charlene Calistro, operations manager of locally owned T&C Surf Designs, is hoping for the best. She said the retailer’s holiday display windows are up and its shops will be offering gift packs and deals on Black Friday, along with limited-edition items and gifts with purchase.
T&C, founded in 1971, has six stores on Oahu, including at Ala Moana Center and Ka Makana Ali‘i in Kapolei and in Haleiwa, which are all frequented by tourists. T&C also has stores at Kahala Mall, Windward Mall and Pearlridge Center, where residents shop.
The stretch from Black Friday to the day after Christmas, Calistro said, is a key driver for sales, although online purchases from the company website occur year-round.
“We feel optimistic,” she said. “However, we live in reality so the government shutdown is a concern.”
Many malls and merchants also plan to host charitable fundraising drives for the needy this holiday season, among them Ala Moana Center, which has more than 300 retailers.
“The holiday season is a special time of year, and shopping centers like Ala Moana Center play an important role in bringing people together,” said Jake Wilson, vice president, property management retail at mall owner Brookfield Properties, in a statement. “Beyond shopping, it’s about creating shared experiences like seeing Big Santa, enjoying live music and hula performances, or taking part in festive traditions that families have celebrated here for generations.”
He added, “Equally important is the opportunity to give back. We’re proud to continue our partnerships with The Salvation Army’s Angel Tree and Red Kettle Programs, and The Giving Machine, offering meaningful ways for our guests to give back to those in need throughout the holiday season.”
Source: The Garden Island
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