Low-priced gifts are all aglow this holiday season

Gifts with a lower price point may be the winners again this holiday season. “Based on last year’s performance, it won’t be a surprise if consumers spend less this holiday season,” said Kathy Grannis, a spokeswoman for the National Retail Federation.

The forecast isn’t all gloomy; there’s opportunity for drug retailers offering lower-priced gift items. Electronic accessories, small home decor products and, of course, toys are likely to be key categories.

For the past few years, electronics have been at the top of consumer holiday wish lists. That means accessories also are hot products. This year, Mizco is emphasizing iPod and MP3 accessories, stereo headphones and Bluetooth headsets. “We have some strong promotions for the holiday season,” said Sam Mizrahi, EVP of Mizco. “Drug retailers do well with accessory kits—they are a great value and make great gifts.” Mizco offers an assorted power wing with top-selling cellular and MP3 accessories on prepackaged shippers, as well as stand-alone racks that can be customized with any product assortment.

Candles are an affordable gift that “everyone is pleased to get around the holidays,” said Barbara Miller, a spokeswoman for the National Candle Association. About 35% of U.S. candle sales occur in the fourth quarter, according to the association. “Holiday candle sales have typically been strong even when the economy is tight,” Miller said. Spa candles have become increasingly popular as a gift item.

“We’ve found that products under $15 work best in the drug channel,” said Chris Barnes, president of Candle Warmers Etc. Barnes expected a strong year for holiday candle sales, particularly the company’s Illumination Fragrance Warmers, which are designed to warm scented oils and wax, and create the glow and ambiance of a candle while releasing fragrance.

“Overall interest in this type of wax candle warmer has definitely moved beyond a market trend,” he said. The company has introduced three new seasonal warmers: Jack O’Lantern, Snowman and Let it Snow. Suggested retail price for each is $13.99.

Holiday ornaments and decor are perennial favorites at the drug channel. American Greetings has added fresh offerings to its Heirloom Ornament Collection. In addition to traditional pieces and such annual licensing favorites as Godzilla, I Love Lucy and Elvis, AG will introduce a new Beatles Yellow Submarine ornament, which will retail for $22.50, and an original selection commemorating “Wicked: The Musical,” which plays a selection from “Defying Gravity” and retails for $27.50.

Some other promising holiday products include:

Joseph Enterprises Chia Pets: The gift item, which has been popular for more than two decades, will be supported by heavy TV promotion during the holiday season. The company, with models from SpongeBob SquarePants to Obama, is looking at producing miniature Chia Pet packs for upcoming seasons;

Novelty pillows from Peek-a-Boo Toys: Available in four versions—Angel, Cutie, Princess and Love—and retailing for $14.99, the pillows have been popular gift items. The company also is featuring plush Ninja Warriors and Superhero Pigs, both lines retailing for $9.99; and

Fushigi Magic Gravity Ball: This skill toy from Idea-Village products has been popular with kids.