Why Dinner’s About to Start Eating More of Your Wallet

Best Of The MonthNew York — If food prices start taking a bigger bite out of your wallet in the near future, you can blame it on Mother Nature.

A confluence of events including strange weather from El Nino, activity on the solar surface and the effects of a U.S. drought years ago are reducing agricultural output, which may drive up grocery store prices for individual consumers and supply costs for dining chains such as Chipotle Mexican Grill (CMG) and coffee shops like Starbucks (SBUX).

The current El Nino weather system, which periodically forms off the Pacific coast of South America and alters weather patterns throughout the world, is projected to be the strongest in decades, according to AccuWeather.

Already, El Nino is causing drought in Asia, most notably in Vietnam, which is the second-biggest coffee producer in the world behind Brazil. Vietnam grows robusta beans and while their taste isn’t typically as appealing as that of arabica beans, what happens in the robusta market matters.

“If robusta production is down, then it will drive up the price of arabica as well,” says Nicholas Gentile, managing partner at New York-based commodity trading adviser Nick Jen Capital Management. It’s possible that any production shortfall from drought in Asia could be made up by more output in South America, he added.

If all goes well, the rains will come to Asia in time, but if they don’t, then expect coffee prices to rise.
If you want milk with your coffee, then things look even bleaker because that’s likely to be more expensive as well.

Milk prices have already jumped in New Zealand and in the first six months of 2016, U.S. prices will catch up, Shawn Hackett wrote in a recent edition of The Hackett Money Flow Commodity Report. The problem is that due to a drought years ago, the price of milking cows is high while current American milk prices are low, which gives diary farmers little incentive to add cows to their herd.

Finally, the number of spots on the sun has started its periodic cycle of decline this year, which will likely lead to lower crop yields and hence higher prices for grains such as wheat and corn. The phenomenon is discussed in detail in a 1976 USDA report from the U.S. Department of Agriculture that examined data from 1866 to 1973.

The number of sunspots fluctuates in a fairly predictable cycle that tends to last around 10 to 11 years. NASA actually counts the spots and makes projections about how many there will be in future years. While the mechanism isn’t understood, there does appear to be a high correlation between spot count and global temperatures, with fewer spots being associated with cooler weather.

NASA projects that the sunspot count is entering its cyclical decline and doing so from a fairly low peak. That doesn’t augur well for crop yields next year.

“Lower-than-average yields are associated with low sunspot activity,” according to the Agriculture Department paper, “Do Sunspot Cycles Affect Crop Yields?” by Virden L. Harrison. The report singles out corn, wheat and rice as particular examples of the phenomenon.

The effect, however it occurs, can be large, although it does vary by crop and the location within the U.S. Declines in average yield of 10 percent during low sunspot years were not uncommon in the study period.

“The bottom line is that the great U.S. crop production miracle of the last two years will not repeat in 2016,” Hackett wrote in a recent report.

High-Tech Means Higher Sales for Many Small Retailers


NEW YORK (AP) — An independent retailer may not look like the cutting edge of technology, but these small businesses increasingly turn to apps and sophisticated software to connect with customers.

Small retailers use high-tech innovations to build relationships with customers; they often can’t compete with big chains on prices, so they aim at better, individualized service. Some of the technology is designed for smaller companies, while some retailers find ways to turn a widely-used computer program or app to their advantage. They’re also able to implement technology faster than many giant retailers because they’re not operating hundreds or thousands of stores.

“Using technology enables the small business to cater to a customer’s needs,” says Michael Moeser, a retailing executive with Javelin Strategy & Research, a consulting company based in Pleasanton, California.

One example: an app called Belly that lets shoppers accumulate rewards points at thousands of small businesses. It helps create an emotional connection between the store and shopper, Moeser says.

Another app called Dolly helps a retailer arrange for merchandise to be picked up from a store and quickly delivered to a customer, saving the shopper from lugging home big packages.

More ways that small retailers use technology:

GO WHERE THE CUSTOMERS ARE

Some small retailers sell on online marketplaces that specialize in one type of merchandise. The sites are similar to Etsy, the marketplace that focuses on goods like jewelry and clothes made by artisans.

Cream City Music sells more than 1,800 items from guitar picks to vintage instruments on Reverb.com, a musical equipment marketplace. The retailer began selling on Reverb.com two years ago.

“People on that website are specifically looking for (musical) products,” says owner Brian Douglas, whose company is based in Brookfield, Wisconsin.

Cream City Music has a brick-and-mortar store and a website, but wants to take advantage of any sales opportunity it can. It’s getting results, Douglas says. Sales from Reverb.com are growing by double digit percentages each month.

AN ONLINE PERSONAL SHOPPER

Soon after online shoppers land on the websites for O’Neill Clothing and Metal Mulisha, the retailers’ software starts suggesting products to buy. The recommendations aren’t random; the software, a computer program called Reflektion, finds out where the shopper is located, and a few clicks on surf or motorbike clothes tells the system enough to start suggesting more merchandise. The more a customer clicks, the more information the system gathers, and the more likely O’Neill and Metal Mulisha are to make a sale, says Daniel Neukomm, CEO of the retailers’ parent, Irvine, California-based La Jolla Group.

The software is more advanced than programs on other sites that make suggestions based on a shopper’s order history, Neukomm says. If a shopper is looking at garments designed as active wear rather than fashion, the software will take that into account. If someone from Wisconsin visits the site, the software is likely to suggest hoodies rather than surfing shorts.

The number of visits to O’Neill and Metal Mulisha that result in sales has increased 25 percent because of the software. The more time a shopper spends on the sites, the more likely the program is to select an item a customer will buy, Neukomm says.

“Like a good wine, it gets better with age,” he says.

TEXT YOUR WAY TO A SALE

Tara Mikolay and her sales staff send hundreds of individual texts to her jewelry store’s customers each week. About half lead to a purchase.

Mikolay, owner of Desires by Mikolay in Chappaqua, New York, tailors each text to a particular customer, sending reminders to husbands about their wives’ upcoming birthdays and including photos with suggestions about what they might buy. She texts women customers with photos of new merchandise that fit their style.

While individual texts are labor-intensive, they’re more effective than mass texting would be, Mikolay says. Even when a customer doesn’t immediately make a purchase, they’re likely to buy when the next big occasion like an anniversary comes around.

“I could place full-page ad in a newspaper, but my chances for making a sale are next to none,” she says. “But I spend time manually doing texting and get great results. It’s a no-brainer.

Market Wrap: Stocks Rally on Raised December Rate Hike Bet

Financial Markets Wall Street

NEW YORK — U.S. stocks closed higher Wednesday and investors appeared positively inclined toward higher rates after minutes from the Federal Reserve October meeting showed a solid core of officials rallied behind a possible December rate hike.

Central bankers at the October policy meeting also debated evidence the U.S. economy’s long-term potential may have permanently shifted lower.

The three major indexes added to earlier gains after the 2:00 p.m. Eastern time release and buying accelerated ahead of the close.

I think the market is ready and comfortable for an increasing Fed funds rate.

“I think the market is ready and comfortable for an increasing Fed funds rate,” said Alan Rechtschaffen, portfolio manager at UBS Wealth Management Americas in New York. “We just have to turn this aircraft carrier around, get out of this zombie-like economy which is being fed on an elixir of low interest rates and get to a process of normalization.”

The Dow Jones industrial average (^DJI) rose 247.66 points, or 1.4 percent, to 17,737.16, the Standard & Poor’s 500 index (^GSPC) gained 33.14 points, or 1.6 percent, to 2,083.58 and the Nasdaq composite (^IXIC) added 89.19 points, or 1.8 percent, to 5,075.20.

Investors widely expect the central bank to raise rates in December, but remain uncertain about the magnitude of the increase and the pace of further hikes.

While stocks often sell off on the prospect of a rate hike, which would raise borrowing costs, many investors are now focusing on a hike as a positive reading for the economy.

“It sounds pretty hawkish to me, that they want to raise rates in December,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin. “That should be a confidence-boosting thing. That means they’re more confident in our economy now.”

Apple (AAPL) shares rose 3.2 percent at $117.29 after Goldman Sachs (GS) added the iPhone-maker to its “conviction buy” list, saying it sees potential for the stock gaining as much as 43 percent from current levels.

The stock provided the biggest boost to the three major indexes.

Movers and Shakers

All 10 S&P sectors closed higher, led by a 2-percent rise in health care, followed by a 1.8-percent rise for the financial sector, which would benefit from higher rates.

Qualcomm and Target were the biggest drags on the S&P. Qualcomm (QCOM) fell 9.4 percent after a South Korean regulator alleged it violated competition laws.

Target (TGT) fell 4.3 percent after warning it will miss its fiscal-year forecast for online sales growth.

Data released Wednesday showed housing starts fell to a seven-month low, but a surge in building permits suggested the housing market remained on solid ground.

NYSE advancing issues outnumbered decliners 2,371 to 697, for a 3.40-to-1 ratio; on the Nasdaq, 1,936 issues rose and 920 fell, for a 2.10-to-1 ratio favoring advancers.

The S&P 500 posted 19 new 52-week highs and 7 lows; the Nasdaq recorded 55 new highs and 116 lows. About 7.2 billion shares changed hands on U.S. exchanges, compared with the 7.3 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.

What to watch Thursday:

  • The Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.
  • Freddie Mac, the mortgage company, releases weekly mortgage rates at 10 a.m.

Earnings Season
These selected companies are scheduled to report quarterly financial results.

  • Best Buy (BBY)
  • Gap (GPS)
  • Intuit (INTU)
  • Ross Stores (ROST)
  • J.M. Smucker Co. (SJM)
  • Williams-Sonoma (WSM)

Fed Officials Again Flag December; See Smooth Rates Liftoff

Janet Yellen Speaks At Monetary Policy Implementation ConferenceNEW YORK — Federal Reserve officials Wednesday continued to flag December as a likely time for interest rates to rise after seven years near zero, with two expressing confidence they will be able to pull off a rate hike smoothly despite fears of an abrupt market reaction.

Investors reacted by increasing the odds for a rate increase next month to 72 percent, from 64 percent Tuesday, based on interest rate futures prices.

Cleveland Fed President Loretta Mester repeated her position that the U.S. economy is now strong enough to absorb a modest policy tightening. Atlanta Fed President Dennis Lockhart, sitting alongside her on a panel in New York, said global financial markets have settled since the August turmoil that caused the U.S. central bank to delay raising rates.

I am now reasonably satisfied the situation has settled down … So I am comfortable with moving off zero soon.

“I am now reasonably satisfied the situation has settled down … So I am comfortable with moving off zero soon, conditioned on no marked deterioration in economic conditions,” Lockhart told a conference of bankers, traders and regulators.

“I believe it will soon be appropriate to begin a new policy phase,” he said, adding he will monitor economic data between now and a meeting on Dec. 15-16, for which he has a vote on policy. Mester regains a vote next year under a rotation.

Sentiment for a December hike took firm hold at the Fed’s October 27-28 policy meeting, according to meeting minutes released Wednesday that showed a solid core of U.S. central bankers poised for liftoff.

The Fed’s October statement helped convince skeptical markets that a rate hike may finally be imminent after several years of near zero rates. But the October session also saw central bankers begin grappling with longer-term issues that may be relevant to the pace of subsequent rate hikes, including whether the U.S. economy’s lower long-term potential means low interest rates will become a permanent norm.

For now, however, Fed officials seem confident that the central bank will meet its twin goals of full employment and stable two percent inflation.

Rob Kaplan, the Fed’s newest policymaker, declined to use his first public appearance as president of the Dallas Fed to comment directly on the timing of a rate hike, but expressed confidence that inflation will rise back to the Fed’s goal over the medium term. The Fed has said it needs exactly that confidence before raising rates.

Once rate hikes start, he said, the Fed will reassess conditions at each meeting and will pause further rate hikes if needed.

The comments were the latest in a string of communications from Fed officials meant to prepare global markets for the first U.S. rate hike in nearly a decade. The policy change is expected to continue pushing the U.S. dollar higher, pulling capital from emerging markets and elsewhere towards rising U.S. rates.

‘Huge Surprise’

New York Fed President William Dudley, whose branch of the central bank will use a handful of new levers to wrench rates up from near zero, told the New York conference he does not expect a “huge surprise” or major market reaction to a hike in part because it has been so loudly telegraphed.

Trillions of dollars of reserves parked at banks and worries that bond markets are less liquid and stable than in the past have added to concerns that deep volatility could greet the Fed rate hike.

Lockhart said he was “very confident” in the new tools and noted that the big focus now was deciding whether to make the policy change next month.

He said that any lingering concerns about U.S. labor market strength have been satisfied for a rate hike. Inflation he said was less clear, but he expects prices to rise as the downward pressure from a strengthening dollar and falling oil prices fades.

“A key point regarding inflation is that conditions have not been deteriorating, just hanging below target,” said Lockhart, seen as a centrist among the Fed’s 17 policymakers. “On balance for me the data have been encouraging and affirm that the economy has been growing at a moderate pace.”

Market Wrap: S&P 500 Scores Best Week in Nearly a Year

Financial Markets Wall StreetNEW YORK — Wall Street racked up a solid week Friday, with health care, technology and consumer stocks making gains and investors looking beyond a widely expected December interest rate hike.

The S&P 500 ended its strongest week in almost a year, while the Dow Jones industrial average erased its year-to-date loss, led by a 5.5 percent jump in Nike (NKE), which announced a $12 billion share buyback and a 2-for-1 share split.

The sporting goods-maker helped send the consumer discretionary sector up 1.2 percent, making it the top gainer among the 10 major S&P sectors.

There’s more risk now that if they don’t raise in December, then people will worry that we’re still not out of the woods.

Health care rose 0.7 percent, led by Allergan’s (AGN) 3.5 percent increase. The drugmaker rose on reports that the U.S. Treasury’s new tax inversion rules were unlikely to thwart its proposed deal with Pfizer (PFE).

Minutes from the Fed’s October meeting, released Wednesday,hardened expectations of a December interest rate hike and hinted at a cautious approach after that.

Many on Wall Street believe that raising rates next month will be interpreted as a sign of confidence in the U.S. economic recovery.

“There’s more risk now that if they don’t raise in December, then people will worry that we’re still not out of the woods,” said Jerry Braakman, chief investment officer at First American Trust, in Santa Ana, California, which manages $1 billion.

With little inflation on the horizon, the Fed is likely to raise borrowing costs only gradually next year, which should help keep Wall Street content, Braakman said.

The Dow Jones industrial average (^DJI) rose 0.5 percent to end at 17,823.81 points and the Standard & Poor’s 500 index (^GSPC) gained 0.4 percent to 2,089.17. The Nasdaq composite (^IXIC) added 0.6 percent to 5,104.92.

The S&P gained 3.3 percent for the week, its best showing since December. The Dow rose 3.4 percent for the week and the Nasdaq added 3.6 percent.

Next week is likely to see tepid trading volume, with many investors taking time off for the Thanksgiving holiday.

Movers and Shakers

Alphabet (GOOGL), Google’s parent company, rose more than 2 percent after Reuters reported the company was planning to launch the Chinese version of its Google Play smartphone app next year. The stock was the biggest influence on the S&P 500 and Nasdaq.

Abercrombie & Fitch (ANF) surged 25 percent. Its quarterly profit more than doubled and same-store sales fell less than expected.

Sprint (S) tumbled 5.4 percent after the wireless carrier said it would raise about $1.1 billion in cash through a sale and lease-back deal with a company backed by Japan’s SoftBank.

Tesla Motors (TSLA) lost 0.8 percent after it said it was recalling 90,000 Model S sedans to check for a possible seatbelt defect.

Advancing issues outnumbered decliners on the NYSE by 1,819 to 1,249. On the Nasdaq, 1,751 issues rose and 1,014. The S&P 500 index showed 32 new 52-week highs and nine new lows, while the Nasdaq recorded 76 new highs and 81 new lows.

About 6.9 billion shares changed hands on U.S. exchanges, below the 7.2 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.

Don’t Let the Airlines Lose Your Luggage This Thanksgiving

FILE - In this May 22, 2015 file photo, travelers wait in line to check in their luggage at Miami International Airport in Miami.  Heading into winter, fliers should take extra precautions with their checked luggage, December and January are traditionally the worst months for lost bags. (AP Photo/Alan Diaz)
NEW YORK — Heading into winter, fliers should take extra precautions with their checked luggage — December and January are traditionally the worst months for lost bags.

To avoid problems, arrive at the airport early enough to let your bag get to the plane, and print out a copy of your itinerary from the airline’s website and stick it inside just in case all the tags get ripped off.

In the U.S. during the first nine months of this year, 3.3 bags for every 1,000 passengers didn’t make it to their destination on time, according to the Bureau of Transportation Statistics. That’s not great if you are one of those people whose bag is delayed or lost. But consider this: during the 2007 peak in air travel, airlines were mishandling more than twice as many suitcases — 7.2 bags per 1,000 passengers.

Globally, the baggage-mishandling rate has fallen 61 percent from its peak in 2007, according to SITA, an aviation communications and technology provider. That has saved the industry $18 billion.

The vast majority of bags — 80 percent — aren’t lost but just delayed, according to SITA. And it takes about a day and a half to reunite passengers with their bags. Another 14 percent are damaged or have their contents reported stolen. And nearly 6 percent of bags are lost or stolen completely.

December and January tend to be the worst months because there are a lot of infrequent travelers checking multiple bags, and a few snowstorms can add to delays and suitcases that miss connections.

The overall improvements to baggage handling come after carriers spent millions of dollars to upgrade their systems.

Tug drivers now get real-time updates of gate changes so they can change their path and ensure that bags make their connection. Scanners allow bags to be tracked throughout the system, preventing a suitcase bound for Chicago from being loaded onto a plane to Detroit. Gate agents have printers to help tag bags that are checked at the last minute because of full overhead bins. And, overall, fewer bags are being checked because of bag fees.

“We continue to invest in technology and in processes so we understand where bags are at all times, and we can manage the failure points,” says Bill Lentsch, senior vice president for airport customer service and cargo operations at Delta Air Lines (DAL).

Airlines are also starting to empower passengers — or at least keep them better informed.

Delta was the first airline to allow fliers to track their own checked luggage, first on the airline’s website in 2011 and then on its mobile app in 2012. Bag tags are scanned when the suitcase is dropped off, loaded onto a plane, loaded onto a connecting flight and then again before being placed on the carousel at baggage claim. Passengers can see all those scans.

American Airlines (AAL) followed suit in August, allowing passengers to see when a suitcase was loaded or unloaded from a plane. Right now, it is only available on the airline’s website but will eventually be part of the mobile app.

Sitting on a plane ready for takeoff and knowing that your suitcase isn’t in the hold below might be frustrating. But airlines say they would rather have passengers know it then and talk immediately to a baggage representative, once on the ground, instead of standing at the carousel waiting for a suitcase that isn’t there.

If your bag is late, you might be able to get some bonus frequent flier miles or even a voucher toward a future flight.

Since 2010, Alaska Airlines (ALK) has promised that suitcases will be on the carousel within 20 minutes of the plane arriving at the gate. If not, passengers get a $25 voucher for a future flight or 2,500 bonus frequent flier miles. Delta copied that policy this year, offering 2,500 bonus miles to existing members of its frequent flier program — but no voucher. Act quickly: Alaska requires you to reach out within two hours of arrival; Delta within three days. And ultimately it’s your stopwatch against the airlines’ — they are the final arbiter of tardiness.

And if you wanted to get that $25 checked bag fee refunded, you are out of luck.

Everyone Loves Same-Day Delivery, Until They Have to Pay

FILE - In this Feb. 13, 2015, file photo, a forklift operator moves a pallet of goods at an Amazon.com fulfillment center in DuPont, Wash. This year, Amazon has been making an aggressive push to offer same-day delivery to its $99 annual Prime loyalty club members. Their service is now available in 750 cities and towns in 16 metro areas. And where Amazon goes, other retailers must follow. (AP Photo/Ted S. Warren, File)NEW YORK — Everyone likes the idea of same-day delivery. But who wants to pay for it?

That’s the problem merchants face as the busy holiday shopping season approaches. They want to offer customers the near-instant gratification that usually only comes with shopping in stores or via apps like Uber and Seamless (GRUB). But the logistics and costs of same-day delivery — the fuel, labor, infrastructure and other costs — have been difficult challenges to surmount.

This year, Amazon (AMZN) has been making an aggressive push to offer same-day delivery to people who’ve paid its $99 fee for Prime loyalty club membership. That service is now available in 23 metro areas. And where Amazon goes, other retailers must follow.

“Over the past 18 to 24 months Amazon has been pushing the bar” for fast and cheap delivery, said Daphne Carmeli, CEO of Deliv, a startup that works with retailers to provide same-day delivery. “If you’re in retail, you have to step up to the new bar.”

Retailers trying to compete with Amazon on the road Amazon created will always be at a disadvantage.

Amazon, of course, doesn’t have to pay for the cost of store upkeep, not counting its new bookstore in Seattle. And it makes money from other non-retail areas, such as its cloud computing arm, so it can afford to offer delivery services others can’t.

“Retailers trying to compete with Amazon on the road Amazon created will always be at a disadvantage,” said shipping industry expert Satish Jindel. “There’s only so long they can absorb the cost, it’s a huge challenge for retailers.”

Providing hassle-free, same-day delivery has been a quixotic quest for retailers for more than a decade. During the first Internet boom, startups like Kozmo.com became ubiquitous in New York as employees with purple messenger bags fanned out to deliver snacks and household goods. But it didn’t make money, went bust and became a cautionary tale for the future.

“I remember using Kozmo.com a decade ago,” said C.J. Dugan, 37, a TV producer in Chicago. “One night we ordered a tub of ice cream and the movie ‘Pitch Black.’ They showed up in about 30 minutes. It was before its time, I guess.”

Fifteen years later, things are definitely different. Driver routes are easier to track with smartphone GPS technology, more brick-and-mortar retailers are speeding delivery by using their stores as de facto warehouses, and more people are willing to work in an “on-demand” fashion popularized by Uber and service apps like Taskrabbit.

So more retailers are taking on the challenge of same day. Start-up delivery service Deliv is working with Macy’s (M), Kohl’s (KSS), Express (EXPR), Williams-Sonoma (WSM) and other brick-and-mortar retailers to expand same-day delivery options. Macy’s offers same-day delivery in 17 cities; Kohl’s this month expanded same day deliveries from six to nine cities.

Craft-selling site Etsy (ETSY) is working with Postmates for a holiday season pilot that will let some shoppers in New York City have items delivered to their door within hours for a flat fee of $20. Apple is also working with Postmates on same-day deliveries in New York and San Francisco.

Uber is jumping into the same-day delivery game, too. In October it launched an UberRush service in New York, San Francisco and Chicago that lets small businesses offer same-day delivery. Any small business within a certain geographic range in those areas can sign up for free and offer their online customers same-day delivery for a fee. In New York, UberRush will cost users $3 to start, then $2.5 a mile with a minimum of $5. Rates vary slightly in Chicago and San Francisco.

The holiday season will be a test for the new services. Not all businesses have found it’s what their customers want.

Last July, eBay (EBAY) shut down its eBay Now service, which it started in San Francisco in 2013 and expanded to four cities. The company said it’s now testing options that are “more relevant” to its sellers.

Rob Howard, who runs same-day delivery provider Grand Junction Inc., said eBay Now’s business model, which paid drivers to enter retail stores, buy an item and deliver it, was “very high cost and unsustainable.” Deliv, by contrast, works with retailers to have packages ready to go for drivers when they arrive.

And the cost remains a sticking point. Amazon offers some same-day deliveries for free, subsidized by revenue streams elsewhere. But others charge $5 to $20, a cost that deters some users.

“It’s nice to have, if you can get it for free,” said Forrester (FORR) analyst Sucharita Mulpuru, who tracks the e-commerce industry, describing the mindset for many.

Speedy delivery could help drive customer loyalty in some cases. Dugan, the former Kozmo.com user, doesn’t use one-day delivery a lot. But he recently ordered a mat for his standing work desk from Amazon Prime Now.

“From the time I placed the order to when it arrived at our reception was just over an hour — it was pretty awesome,” he said. “I can’t say I’ll use the service all the time, but this was about the perfect experience when I really, really needed something.”

Consumers, Stores Face Off Over Depth of Holiday Discounts

Shoppers Inside A Target Corp. Store Ahead Of Black Friday SalesNEW YORK and CHICAGO — Target’s (TGT) 10 percent discount on a $30.49 pair of embroidered curtains wasn’t nearly enough to entice Valerie Jenkins, shopping in Chicago the weekend before Thanksgiving.

She expects the 60 to 70 percent off she got during the last holidays. “There were some very good deals this time last year,” she said.

Jenkins represents a problem for retailers going into what traditionally has been the peak shopping day of the holiday season, Black Friday. Big retailers are keeping discounts for the weekend following Thanksgiving at around the same level as last year, according to data supplied to Reuters by MarketTrak.

But polls by Reuters/Ipsos and some others show shoppers, who got even bigger discounts closer to Christmas last year, are cautious with their spending and willing to wait for deals.

The Reuters/Ipsos survey found more people planned to cut holiday spending than increase in every category surveyed: clothing, jewelry, electronics, food and toys, and that 46 percent felt they could wait longer in the season to buy because of faster shipping.

Black Friday shopping will help set the tone for the rest of the holiday season, signaling to retailers whether they need to drop prices or change promotions. While Black Friday isn’t always a strong forecaster of holiday spending, last year reports of poor Black Friday spending were followed by deeper discounting and a rush of buying in the week before Christmas.

J.C. Penney (JCP) offered an average 58 percent off in Black Friday ads this year, down from 59 percent last year, according to MarketTrak, which looks at circulars from top retailers. Kohl’s (KSS) is offering 54 percent off, up from 51 percent in 2014, and discounts from Staples (SPLS) and Office Depot (ODP) are both a touch less than last year, at 45 and 50 percent, respectively.

Appliances, entertainment items, infant products and hardware showed narrowing discounts, MarketTrak reported, while promotions for apparel, toys and electronics were getting bigger.

Kurt Jetta, head of retail industry researcher TABS Group, found the discounts underwhelming.

“The fact that retail has been so weak coming in to the season would suggest they may need to ramp up efforts to make up for this later,” Jetta said.

Consumers were cautious going into the holidays, with sales at Macy’s, Nordstrom Inc and Best Buy missing expectations in recent quarterly results. Target’s online sales fell due to a drop in demand for electronics.

Looking for Discounts

The Reuters/Ipsos survey of 4,639 adults from Nov. 12-23 found 28 percent of consumers expected discounts of 50 percent or more on most items, 36 percent hoped to see promotions of at least 33 percent while 49 percent expect a minimum discount of 20 percent on most products.

A survey for Boston Consulting Group found 70 percent of consumers would spend the same or less as last year, describing the consumer outlook as “tepid.”

Still, spending intentions are difficult to gauge and Gallup reported Americans plan to spend $830 on gifts this season, up from $720 a year ago at this time.

The National Retail Federation expects holiday sales to rise 3.7 percent, slower than last year’s 4.1 percent growth rate, due to stagnant wages and sluggish job creation.

Many retailers including Macy’s (M) came into the season with high winter clothing inventory after warm weather in September and October, which also will increase discounting pressure.

“Consumers have been trained to know that they can wait, and they will wait and that will force the retailers to continue to be promotional,” said Joel Bines, managing director at AlixPartners.

A Look at the Hot Toys for Holiday 2015

In this Sept. 29, 2015, photo, the Marvel Avengers Remote Control Hulk Smash XPV from Jakks Pacific is displayed at the TTPM Holiday Showcase in New York. The U.S. toy industry is expected to have its strongest year in over a decade, with anything robotic expected to help drive holiday sales. The growth is being fueled by the increasing popularity of toys based on Hollywood blockbuster films and better technology that allows toys to do things like talk back to children. (AP Photo/Mark Lennihan)

NEW YORK–which toys will warm the hearts of parents and kids for the holiday 2015 shopping season?

Holiday toys hit the shelves in recent weeks. And so far, just as in the past few years, there’s no single hot toy emerging. But anything “Star Wars,” lifelike robotic pets and remote controlled toys should drive sales.

As the holiday shopping season kickoff starts over Thanksgiving weekend, toy sales will heat up.

The Associated Press has compiled a list of some of this year’s expected hot toys and trends for 2015:

‘Star Wars’

  • The Black Series Kylo Ren Force FX Lightsaber by Hasbro: toy weapon makes light and sound effects. $199.99.
  • BladeBuilders Jedi Master Lightsaber set from Hasbro: system allows kids to customize weapons. $49.99.
  • The Force Awaken’s BB-8 Droid by Sphero: remote-controlled robot that connects to an app. It changes expression and even perks up when given voice commands. $149.99.
  • Star Wars Millennium Falcon RC Quad by Spin Master: remote-controlled version of the iconic ship. $140

Robotic Pets

  • Little Live Pets CleverKeet from Moose Toys: interactive, singing and talking bird. He responds to voice. $59.99.
  • Imaginext Ultra T-Rex from Mattel’s Fisher-Price: robotic dinosaur that has sound effects, walks, stands and fires projectiles. $99.99.
  • FurReal Friends StarLily My Magical Unicorn from Hasbro: robotic unicorn with a horn that lights up. Also can spread and flutter her wings. It connects to an app. $119.99.
  • Smart Toy Bear from Mattel’s Fisher-Price: plush bear that connects to an app and customizes based on the child’s preferences. $99.99.
  • Bright Beats Dance & Move BeatBo: Press BeatBo’s tummy or any of the buttons on his feet to activate fun songs. Parents or the baby can record a phrase that can be remixed into a song for language and communication skills. $39.99.

Other

  • Kidizoom Smartwatch DX from VTech: smartwatch for kids that can take pictures and videos. $64.99

Fast and Furious:

  • Nerf Rival from Hasbro: latest blaster under Nerf that has a trigger lock and high-impact rounds. $49.99 (1200 blaster) $24.99 (700 blaster).
  • Marvel Avengers XPV Remote Control Hulk Smash Vehicle from Jakks-Pacific: remote-controlled Hulk that smashes, flips and does wheelies. $69.99.
  • Anki Overdrive robotic car set: radio-controlled car set that works with an android or iPhone device. $149.99.
  • Paw Patroller from Spin Master: toy truck inspired from Nickelodeon’s animated series “Paw Patrol” features a working elevator, a functional Command Center inside and sound effects. $59.99.
  • Pie Face from Hasbro: Kids put whipped cream or a wet sponge on the “hand” of the game and start turning the handle. It could go off any minute — and splat. $19.99.

Cyber Monday Sales Still on Top, but Losing Some Luster

FILE - In this Friday, Nov. 23, 2012, file photo, Tashalee Rodriguez, of Boston, uses a smartphone app while shopping at Macy's in downtown Boston. For the first time, analysts predict more than half of online traffic to retailer sites will come from smartphones than desktops during the busy Black Friday holiday shopping weekend. And though it�s still a small fraction of online revenue, mobile sales are jumping too. Larger phone sizes, improved retailer apps, more online deals and shoppers� increasing comfort with shopping online are driving the trend. (AP Photo/Michael Dwyer, File)NEW YORK — Shoppers traded bricks for clicks Monday, flocking online to snap up “Cyber Monday” deals on everything from cashmere sweaters to Star Wars toys.

Now that shoppers are online all the time anyway, the 10-year-old shopping holiday has lost some of its luster as online sales on Thanksgiving and Black Friday pick up. But enough shoppers have been trained to look for “Cyber Monday” specific sales to ensure the holiday will still mean big bucks for retailers.

It’s too early for sales figures, but Monday is still expected to be the biggest online shopping day ever, likely racing up more than $3 billion in sales, according to comScore (SCOR). Adobe (ADBE), which tracks 200 million visitors to 4,500 retail websites, said $490 million had been spent online as of 10 a.m. Eastern time Monday, the latest data available. That’s 14 percent higher than a year ago.

“A lot of people wait to see if deals are better on Cyber Monday,” said Forrester Research analyst Sucharita Mulpuru.

New Yorker Anna Osgoodby was one of the many online shoppers who spread her purchases throughout the holiday shopping weekend. On Black Friday, she took advantage of a 35 percent sale at online accessories retailer ashandwillow.com, buying earrings, a necklace and bracelet. Then she bought earrings and clutches Monday during its 40 percent off sale.

“That extra 5 percent convinced me to buy a few more,” she said.

Some hot sellers were in scarce supply by early afternoon Monday. At Target (TGT), a Swagway hoverboard was sold out by early afternoon. The electronic transportation gadget had been $100 off at $399. Drones and some Star Wars toys were hard to find as well.

“There are certain hot products, hover boards seem to be a phenomenon, they’re selling out everywhere,” said Scot Wingo, chairman of ChannelAdvisor, which provides e-commerce services to retailers.

Adobe found 15 out of 100 product views returned an out-of-stock message as of 10 a.m., 2½ times the normal rate.

And there were a few brief outages at sites like Neiman Marcus and Target and online payments company PayPal reported a brief interruption in service.

Retailers have been touting online deals since the beginning of November. And they no longer wait for Monday to roll out Cyber Monday deals, either. Amazon (AMZN) started “Lighting Deals” on Saturday and Walmart (WMT) beginning all of its Cyber offers at 8 p.m. Sunday.

‘Digital Deals’

“It’s no longer about one day, but a season of digital deals,” said Matthew Shay, president of retail trade group The National Retail Federation.

That seems to have taken a toll on brick-and-mortar shopping. Frenzied crowds seemed to be a thing of the past on Black Friday — the busy shopping day after Thanksgiving — and sales fell to $10.4 billion this year, down from $11.6 billion in 2014, according to preliminary figures from research firm ShopperTrak.

“Consumers are recognizing the Internet is the place to go for a deal any time, any day,” said Gene Alvarez, managing vice president of research firm Gartner (IT).

“I personally skip Black Friday just to shop Cyber Monday,” said Mark Flores, a parks and recreation director from Lynwood, California. But this year, he started online shopping on Black Friday, buying five pairs of Sorel and Uggs shoes for gifts and eight Chromecasts that were two for $50 instead of $35 off. He planned to shop on Cyber Monday too, but did not find compelling deals. “Nothing standing out so far,” he said midmorning on Monday.

Research firm comScore expects online sales to rise 14 percent to $70.06 billion During the November and December shopping period, slowing slightly from last year’s 15 percent rise. Online sales make up 10 percent of overall retail sales, but that increases to 15 percent during the holidays as online shoppers snap up Black Friday and Cyber Monday deals, according to research firm Forrester (FORR).

The name “Cyber Monday” was coined in 2005 by the National Retail Federation’s online arm, called Shop.org, to encourage people to shop online. The name was also a nod to online shopping being done at work where faster connections made it easier to browse. Now, even with broadband access, Cyber Monday continues to be a day when retailers pull out big promotions.