The National Retail Federation expects a good but hardly great holiday season, with sales online and off expected to rise 3.9 percent during the months of November and December.
If met, the forecast would lift sales for the season to $602.12 billion, up from $579.49 billion in 2012, with a percentage increase in excess of the 3.5 percent uplift experienced last year. Sales growth in the last 10 years has averaged 3.3 percent, bookmarked by a 6.8 percent increase in 2004 and the sole decline during the period, 4.4 percent negative, in the recession-ravaged year of 2008.
Online sales growth, included in the overall forecast, is expected to land between 13 and 15 percent this year, taking it as high as $82 billion, but below the 15.5 percent growth reported for the final three months of 2012 by the Commerce Department.
Matthew Shay, NRF’s president and chief executive officer, told WWD the projection for holiday includes possible effects from the current government shutdown and a possible confrontation later this month over the debt ceiling. “There is a sense of optimism that this can be resolved,” he said. “This should all be long behind us before we get to Nov. 1, and if that’s the case, November and December could be very solid.”
If that’s the case, retailers would be heading into holiday without a fiscal showdown looming, unlike last year, when the arrival of sequestration put a damper on holiday sales. However, he acknowledged that, were there to be a prolonged government shutdown, “the economic effect would be felt across the entire economy and beyond the impact on those being furloughed.”
Shay said that sales had shifted in recent months away from discretionary purchases and toward higher-ticket items as many consumers sought to lock in low interest rates on loans in anticipation of “tapering” by the Federal Reserve. More detailed numbers on NRF’s expectations by sector, derived from consumer interviews, will be released shortly. The forecast is based on econometric data including consumer confidence, consumer credit and disposable income.
Shay characterized key economic metrics, such as job and gross domestic product growth, as “teetering on incremental for years. This is better than the mentality of a few years ago, where people were thinking as flat as ‘the new up.’ There are underlying economic fundamentals that are showing signs of strength, but again, we’re left to balance them with uncertainty that is generally self-inflicted.”
He added that, in conversations with the Washington-based organization’s members, he sensed expectations of another highly promotional holiday season, with continuing integration of digital technology helping to make retailers “more customer-centric and capable of delivering value” than in the past.
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