Holiday shopping outlook good so far

Share with others:

Print Email Read Later

If the nation's elected officials don't create any "man-made disasters," consumers could deliver a solid holiday shopping season this year with sales growth of 3.9 percent boosting spending to $602.1 billion, according to a leading retail trade group.

But that forecast depends heavily on ending the federal government shutdown and dealing with the debt ceiling -- issues that now threaten the U.S. economy and consumer spending, according to officials with the National Retail Federation, who served up their annual holiday sales forecast along with generous servings of frustration and warning.

"At the moment, we think we can weather this if it gets resolved quickly," said Matthew Shay, president and CEO of the Washington, D.C.-based organization, during a conference call with reporters Thursday.

The prediction for a 3.9 percent gain in sales for November and December compares to the 3.5 percent sales growth that the group calculated last year.

In October 2012, the retail federation had predicted a 4.1 percent gain, then Hurricane Sandy slammed into much of the heavily populated East Coast and the federal funding "fiscal cliff" fight dragged on into the holidays.

"Consumers will come out and shop and spend, if we don't get in their way," said Mr. Shay, calling things like the shutdown and the fiscal cliff "self-inflicted wounds."

The retail federation's 2013 holiday forecast is in line with predictions from other organizations trying to get a handle on how the season will play out. Shopping in the last months of the year can account for between 20 and 40 percent of merchants' annual revenues.

New York accounting firm Deloitte last week issued a projection for a 4 to 4.5 percent increase in sales for the months of November, December and January, a level that would be about the same as last year's 4.5 percent gain. ShopperTrak, a Chicago retail tracking firm, expects sales for November and December to be up 2.4 percent, down from last year's 3 percent gain.

The exact numbers vary as each group sets its parameters slightly differently, but the tone of muted optimism is consistent.

"Although the economy continues to recover slowly, consumers remain cautious about spending and are not ready to splurge," said Bill Martin, founder of ShopperTrak in that company's mid-September announcement.

If the latest impasse inside the Beltway continues, it won't help retailers who already are planning their promotions and inventory flows around value-focused consumers and a shortened season -- there are fewer weekends between Thanksgiving and Christmas this year than last year.

Even Hanukkah comes early this year, starting the day before Thanksgiving.

Intense competition for consumers' attention during the holiday shopping season is likely to mean retailers move to generate buzz early and then work to keep interest up.

"This will continue to be a very promotional year," Mr. Shay said. "It's been promotional to this point."

homepage - businessnews - holidays

Teresa F. Lindeman: or at 412-263-2018.


Create a free PG account.
Already have an account?