Retail Sales to be at Weakest Since 1991: Report
It may come as little surprise, but analysts are predicting a rather grim outlook for retail sales this holiday season.
In fact, sales in November and December are expected to increase by only 1.5%, consulting and market research firm TNS/Retail Forward estimated this week. That prediction would make it the worst holiday season for sales since 1991, when retailers reported a 1.2% increase.
Last year, sales jumped 2.7% and 3.8% in 2006, TNS/Retail Forward said. The largest gain over the last 17 years was 7% in 2005.
“The holiday sales forecast represents a weakening from modest third-quarter growth as the boost from tax rebates runs out,” Frank Badillo, senior economist for TNS Retail Forward, said in statement. “The benefit from a letup in gasoline prices will be overwhelmed by the impact of rising unemployment, tighter credit and other hardships on households. And, unfortunately, the trends in economic conditions offer no sign of an impending recovery.”
A separate study from consulting firm Deloitte found a slightly rosier prediction, estimating a 2.5% to 3% increase in sales for the holidays. But the firm said even that result would make this season one of the smallest increases since 1991.
Supercenters and warehouse stores will likely see the best results this year, while department stores, home furnishing stores and luxury marketers are expected to see sales decline, the report said.
One exception will be with consumer electronics stores, which are estimated to post a 4% sales growth versus 3.5% last year. Another bright spot may come from online sales, which are forecast to grow 9% this holiday season. While TNS/Retail Forward predicts an increase in the channel, it will mark the first single-digit growth rate for online retailing during the holiday shopping season since 1999. Last year, online sales grew 19%,
“The letup in online shopping reflects the spreading impact of the economic downturn since the last holiday season, particularly among upper-income shoppers,” Badillo said. “These shoppers, who are more likely to shop online, have turned increasingly value-focused in recent months as they have felt worse off with regard to investments, home values and other economic measures.”
For more coverage on marketing at retail
Related Article:
