by Doug Desjardins
With the start of the holiday shopping season just a few days away, research firms are issuing their holiday sales forecasts and, so far, most of them are optimistic.
The National Retail Federation (NRF) is forecasting a 2.3-percent increase in holiday spending, just below the 10-year average of 2.5 percent. 
The low-single-digit increase isn’t much, but it’s a marked improvement from a 0.4-percent increase in 2009 and a 3.5-percent decrease in 2008.
“While consumers have shown they are once again ready to spend on what’s important to them, they will still be very conscientious about price,” said NRF chief economist Jack Kleinhenz. “Retailers are expected to compensate for this fundamental shift in shopper mentality by offering significant promotions throughout the holiday season and emphasizing value throughout their marketing efforts.”
The NRF report says retailers have been more conservative with inventory levels this year to make sure they’re not stuck with excess merchandise that has to be marked down, something that was a major problem in 2008 when the economy unexpectedly took a nosedive just before the holidays.
“Though the industry is on stronger footing than last year, companies are closely watching key economic indicators like employment and consumer confidence before getting too optimistic that the recession is behind them,” said NRF president Matthew Shay.
The International Council of Shopping Centers (ICSC) is more optimistic about the holidays. It’s forecasting a 3- to 3.5-percent increase in sales, which would be the biggest jump since a 4.4-percent increase in 2006.
“The key story is that the retail recovery continues and that bodes well for the upcoming holiday shopping season,” said Michael Niemira, chief economist and research director for the ICSC. “Additionally, we expect holiday hiring to improve moderately over last year and overall employment growth to improve as well.”
Research firm NPD Group is predicting that consumers will continue to shop at discount-oriented retailers during the holidays, a trend that emerged last year during the depths of the recession. And it expects consumers to search for deals online before venturing out to stores.
“Our survey showed 44 percent of consumers plan to look around for the best price and value before they buy, which could benefit online sales,” said NPD chief industry analyst Marshall Cohen. “As consumers pre-search by scouring Web sites for the best prices and deals, they will likely discover that shopping online offers not only competitive prices but a lot more convenience when they decide to buy online.”
NPD’s consumer survey showed discount stores will be the top destination this year, with 54 percent of respondents saying they’ll buy at least some of their gifts in that channel. The second-most popular choice was e-commerce, with 35 percent of shoppers saying they’ll buy online this year. National chains were a close third at 29 percent.
At the bottom of the list are outlet stores (16 percent), clothing specialty retailers (15 percent) and off-price retailers (13 percent).
Resources
NRF Forecasts Holiday Sales Increase of 2.3 Percent
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