Holiday Sales: How Low Will They Go?
Nobody’s expecting much in the way of holiday sales increases this year, and they shouldn’t be, according to The National Retail Federation. The NRF today released its 2009 holiday forecast, projecting holiday retail industry sales to decline 1% this year to $437.6 billion.
I guess a 1% drop decline is better than the 3.4% decline NRF reported for holiday 2008. And it beats the 3% fall the Federation is expecting for retail sales for all of 2009.
But it’s hard to get excited about what for many merchants is the biggest season of the year when you know sales are most likely going to be down from last year. And last year sales results for most were just awful.
Could it be worse? Sure. An industry investment expert told me last week that the conventional wisdom of the moment was that if your sales were down 10%, you were doing okay. Ouch.
How are merchants going to going to fight for holiday sales? They’re expected to go heavy on the promotions—free shipping offers are already cropping up.
And they’d be wise to focus on well-priced, functional items. The NRF’s chief economist Rosalind Wells believes U.S. consumers will focus on practical gifts and shop on a budget this holiday season.
(This is true in my house: I’m hoping to get a new salad spinner for Christmas. Talk about dialed-down expectations…)
Speaking of practical gifts and budget shopping, Neiman Marcus is scheduled to unveil its fantasy gifts Christmas book this morning. To reflect the changing times, the luxury products retailer is said to be focusing on offering more affordable items this year.
But I’d guess what’s affordable in Neiman Marcus’s holiday catalog is still out of reach for the average consumer. I don’t think you’ll find a salad spinner in there.
October 8th, 2009 at 7:39 pm
Well Melissa, I know if my wife got a salad spinner for Christmas, it would be a long, cold winter. Recently read a piece on the PBBI blog by Deb Purcell indicating that scaled back inventories and less selection could also play a role in sales results this year. Does that ring true for you?
Article at http://analytics.pbbiblogs.com/2009/09/30/slim-pickens-for-the-2009-christmas-season/
October 9th, 2009 at 12:00 pm
You’re right, Ed–I should set my sights higher. Maybe a new toaster? I’ll work on that!
I do think that reduced inventories and fewer choices–not to mention worse service, thanks to retail staffing cutbacks–will hurt holiday sales. I pointed out in my September editor’s note (http://multichannelmerchant.com/crosschannel/0901-holiday-orders-focus/index.html) that this could be good for direct merchants, who have a bit more flexibility with inventory and tend to provide better service than many stores today. We shall see…