Holiday shopping season kicks off in Minnesota amidst economic uncertainty, tariffs

CHRIS FARRELL: This weekend marks the kickoff to the holiday shopping season. For retailer Target, its projections show a challenging outlook for the holiday season. And MPR has reported on multiple small businesses that have been affected by the tariff coaster we've seen so far this year.

So, whether the kind of shopper who will line up at big-box stores for Black Friday or if you like to keep it lower key with a few small businesses, chances are holiday shopping will feel slightly different this year.

Here to talk about what to look out for this season is Bruce Nustad. He's the President of the Minnesota Retailers Association. And welcome back to the show, Bruce.

BRUCE NUSTAD: Oh, thanks. Good afternoon.

CHRIS FARRELL: So, talk about some of the projections. I mean, what are you hearing from some of the big-box retailers, from the smaller businesses? What are their expectations as far as the consumers opening their wallet?

BRUCE NUSTAD: Well, this is the season of optimism for retailers. We really look for a great holiday season. Setting that aside for a second, it's certainly been a little turbulent walking up to the holiday season. Consumers are smart and have a lot of information in front of them, especially here in Minnesota.

So we're watching tariffs pretty close. We're just watching the news of the day, too. But I think we're expecting a pretty good holiday season. I think we'll see, overall, year-over-year slight increases in sales but maybe somewhat flat with last year.

CHRIS FARRELL: So are you seeing the impact of tariffs? I mean, a lot of times, we have this economic conversation about tariffs and it's going to affect this piece of furniture or that appliance. But what are you really seeing as far as when I'm going to go to a store and I'm going to buy some good, am I seeing the impact of tariffs?

BRUCE NUSTAD: Yeah. What's super interesting to me is it depends on the product you're purchasing. And thank you for mentioning furniture. Furniture has seen just a tremendous impact from a terrorist perspective. So it depends category by category.

I think at the end of the day, most of us here in Minnesota, we've got a family budget. And we're going to stick to that budget. So it might mean, if we're buying a bigger ticket item that has a little higher impact with tariffs, we might do a little less-- fewer gifts, but we'll probably still spend about the same amount.

CHRIS FARRELL: Well, I'm glad you used the word "budget." Budgeting at the holiday season, that's a good thing. But I do want to ask you, speaking of budget, bringing in some income, what about seasonal hiring? And this is anecdotal. It's my own experience. But I usually would be getting emails from various big-box retailers, postal service, you name it, come on to work for a couple of weeks. I haven't gotten much this year.

BRUCE NUSTAD: Yeah, I think it's super interesting because the holiday season for retailers really starts actually before October now. So I think you see a lot of retailers, from the smallest to the small, to the biggest to big, trying to pace themselves relative to the information they're putting out to consumers.

I mean, you don't want to burn up a consumer on the front end of the holiday season and then not having to bring those dollars back at the back end. So, I think you're seeing a little bit more measured approach to advertising.

CHRIS FARRELL: And what about seasonal hiring?

BRUCE NUSTAD: Yeah. And you know what? Seasonal hiring is great. We're seeing fairly strong seasonal hiring. However, I'll put an asterisk to that. Over the last few years, we've seen a trend here in Minnesota of offering more hours to existing employees sometimes versus bringing on an employee just for the holiday season. So I think we're continuing to see that trend continue as well.

CHRIS FARRELL: So, what would you like to highlight? I mean, where are local businesses shining right now?

BRUCE NUSTAD: Yeah. You know what? The great thing about the Minnesota consumers, we love all the avenues available to us. We love a good in-store experience. And I think when we look back on this upcoming weekend, we're going to see that consumers really turned out for retailers, especially around Small Business Saturday and even Cyber Monday. We think of that as a cyber online event. But we still get a fair amount of in-store shopping on those days.

So, I think at the end of the day, we're going to see just a really solid weekend coming up. We're going to see consumers that purchase online and in store. Again, here in Minnesota, I think we tend to vary our dollars relative to where they go, whether that's in store or online.

CHRIS FARRELL: So, is Black Friday still a big deal? I mean, there was certain points in my life it was a really big deal. I don't get the sense that it is today.

BRUCE NUSTAD: It is still big. I mean, it'll still be the biggest shopping day for Minnesotans when you look at Thanksgiving through. So it's going to be almost double any other shopping day, so it's still really important.

CHRIS FARRELL: Well, that's a lot of money then.

BRUCE NUSTAD: Yeah, it is. But again, we're just really spreading out our holiday spending, so it's maybe not quite as big as it used to be. I mean, it's not quite as climactic as it used to be. Retailers actually really got away from get people to line up at the store at 2:00 AM, and then it just gets a little chaotic. We'd really rather avoid that. That's not a great customer experience.

CHRIS FARRELL: No. No, it's not. And where are local businesses hurting right now?

BRUCE NUSTAD: I would say if you look at of your downtowns and your main streets, again, it's just been a little softer, I think, over the last six months. So that's why we love the holiday season because we see a lot of those small businesses, really see some great consumer support. But I think that's the segment that really needs folks to show up for the holiday season over this next weekend.

CHRIS FARRELL: So, again, this is anecdotal. But my sense is that we started to see discounting earlier in the holiday season compared to previous years. Is that true? Or what is going on with the discounts?

BRUCE NUSTAD: Yeah, I think I can say safely that this year, more than ever, those discounts started early. And it's because families like mine and maybe yours, we start to shop early a little bit too. We start thinking about the holidays a little early. I know everybody complains about those holiday decorations out around Halloween. But the truth of the matter--

CHRIS FARRELL: I'm one of those people. I am one of those, I admit it.

BRUCE NUSTAD: Truth of the matter is consumers actually respond to that. And they're doing their holiday shopping that early, believe it or not.

CHRIS FARRELL: So we're entering into Black Friday. We've got this big weekend after Thanksgiving. So what should shoppers be mindful now that we're getting really into this holiday shopping season?

BRUCE NUSTAD: I think just be a little patient. I think one thing that the pandemic taught us a few years ago is in today's retail model, we have to be a little patient with the store and those that are working at the store.

We're so grateful for those who show up for consumers during some long hours and sometimes during some frustrating times during the holiday season. So, be kind to your neighborhood retail workers. They'll appreciate that. And just, again, keep an eye out for those deals on those items that you're really looking for. And know that that deal season will last all the way through, really probably the first of the year.

CHRIS FARRELL: Last quick question. So have you done your holiday shopping?

BRUCE NUSTAD: I had a really good start, full disclosure. But then I lagged. So now I'm starting to feel a little bit of the pressure like a lot of us.

CHRIS FARRELL: All right. Well, thanks a lot. Glad you could join us.

BRUCE NUSTAD: Yeah, anytime. Thanks for celebrating the holiday season with your local retailers.

CHRIS FARRELL: That was Minnesota Retailers Association President Bruce Nustad.