Thursday, October 7, 2010

Meager increase forecast for holiday retail sales

With the economy still iffy, retailers are going into the 2010 holiday season in November much as they did last year — with lean inventory and discounts.
Holiday retail sales are expected to rise 2.3 percent this year to $447 billion, according to a forecast out Wednesday from the National Retail Federation. The group is going with a figure above last year's 0.4 percent rise and the 3.9 percent decline experienced in 2008 just after the stock market crash.

National Retail Federation President and CEO Matthew Shay said that although retailers are feeling more optimistic this year, there are erratic indications from still-elevated unemployment figures and shifting consumer confidence.

Retailers are expected to keep a tight control on inventory, much like last year, and will try to expand sales opportunities through new ways of shopping such as on mobile phones.

RelatedChart: U.S. holiday sales forecast

The other major retail trade group, the International Council of Shopping Centers, released its forecast for holiday sales on Tuesday. It is expecting the largest increase since 2006, with a 3 percent to 3.5 percent gain over last year. Sales for November and December rose by 4.4 percent in 2006.

"The key story is that the retail recovery continues, and that bodes well for the upcoming holiday shopping season," said Michael P. Niemira, chief economist for the council.

But consumers just don't have as much money to spend on gifts or themselves this holiday season, according to a survey by Accenture, a New York-based consulting firm.

A majority of them — 83 percent — plan to spend the same or less on holiday gifts compared with last year.

"The 2010 holiday shopping season will be spectacularly unspectacular for many consumers, but that will suit retailers who remember well the turbulence of holiday '08," said Janet Hoffman, managing director of Accenture's retail practice.

Of those who are spending the same or less this year, about half said it was because they have less discretionary income this year and a third said they have concerns about the economy.

The online survey questioned 526 U.S. consumers last month.

It also indicated that 93 percent of consumers find discounts important or very important for their holiday purchases. Only 13 percent said they were willing to pay full price for specific gifts this year.

.tweetbutton { margin-top: -3px; margin-right:-18px; }

Retailers’ reports show tepid May for shoppersReal Estate Outlook: Housing Numbers Slump