Retailers predict a lackluster holiday season
Retail industry groups are predicting a subdued holiday season, with smaller gains than in 2010, as consumers struggle with prolonged economic worries.
The International Council of Shopping Centers on Wednesday forecast that U.S. holiday sales would post a moderate gain, with sales expected to increase 2.2% during the November-December period compared with the same period last year.
The group said retail momentum had been good lately but that there were economic roadblocks ahead that could dampen sales.
Last month, the group’s chief economist predicted that sales during the period would be up 3.5%. In 2010, holiday sales rose 5% year over year, in the best Christmas season since the recession.
Also Wednesday, research firm ShopperTrak said it expected holiday retail sales to rise 3% and foot traffic to decrease 2.2% year over year as consumers limit their shopping trips.
ShopperTrak said it expected foot traffic to continue falling through the end of the year because of high unemployment and gas prices. So far this year, shoppers have visited an average of 3.1 stores per shopping trip, down from 3.19 in 2010.
“Converting fewer numbers of shoppers to buyers has never been more important for retailers,” the group said.
According to ShopperTrak, holiday sales in apparel and accessories will increase 2.7%, while foot traffic in that category will decline 1.1%. Lower-end apparel and accessories specialty stores may be pressured to cut prices to compete with discounters.
Sales in the electronics and appliance sector are expected to rise 1.2%, while foot traffic will drop 4.9%. The category’s weak outlook is due in part to the limited number of “blockbuster” electronic products being introduced this season, ShopperTrak said.
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