Retailers can expect moderate holiday sales this year, a disappointment after last year’s strongest holiday season in five years, according to the National Retail Federation.
Total holiday sales are expected to increase 5% to $435.3 billion compared to a 2004 sales jump of 6.7% to $414.7 billion. Hurricane Katrina (and now possibly Hurricane Rita), as well as high prices as the pumps contributed to a more tempered outlook, the NRF said.
“A combination of many factors, including energy prices, the job market, disposable income and consumer confidence, will ultimately affect retailers’ sales this holiday season,” said NRF Chief Economist Rosalind Wells, in a statement. “Though it might be easy to label gas prices as the make-or-break factor for the holidays, it is crucial for analysts to look at the big picture instead of isolating one economic indicator to project sales.”
Retailers are expected to pull out all stops this year offering aggressive pricing strategies including sales and promotions throughout the season.
The holiday season is the most successful time of year for retailers with one-fifth of sales, or 19.9%, rung up over the holidays.
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