Holiday retail sales expected to drop 1%
It still won’t look a lot like Christmas for retailers this year.
Retail sales during the crucial November-December period are projected to fall 1%, to $437.6 billion, from the same period in 2008, the National Retail Federation said in its holiday forecast to be released today.
That’s bad, but not quite so dismal as the 3.4% drop last year, the trade group said.
“The expectation of another challenging holiday season does not come as news to retailers,” said Tracy Mullin, the group’s president. “Retailers’ focus on the holiday season has been razor-sharp, with companies cutting back as much as possible on operating costs in order to pass along aggressive savings and promotions to customers.”
The 2008 holiday season was the weakest in four decades, despite some of the most drastic markdowns ever seen. Several major retailers called it quits afterward.
This year, retailers are banking on slightly higher consumer confidence and pent-up demand. Many have been trimming holiday hiring budgets and scaling back inventory,
Still, “what’s lingering is consumers’ reluctance to spend,” said Richard Giss, a partner at Deloitte & Touche in Los Angeles. “People are not feeling secure in their employment and they’re not feeling strong enough about the economy to take a risk on it.”
The National Retail Federation measures holiday performance as retail sales in November and December. Categories include department stores, discounters, grocery stores and specialty stores. Excluded are car dealers, gas stations and restaurants.
Last week, the International Council of Shopping Centers predicted that holiday sales at major U.S. chain stores open at least a year would increase 1% over the same period in 2008.
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