WASHINGTON–“Average” and “solid” are how the National Retail Federation characterized the upcoming holiday shopping season in its forecast for retail sales during the period.
NRF said retail sales during the season should rise 2.8 percent, slightly above the average increase for the period over the past 10 years. That prediction is significantly off the 5.2 percent increase retailers enjoyed in the 2010 holiday season, however, indicating that consumers remain worried about the economy and jobs as the stores stock up for their biggest selling period of the year.
The stores are ready for such uncertainties, according to NRF President and CEO Matt Shay. “Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season,” Shay said. Key indicators—including 14 straight months of retail sales growth and a substantial reduction in household debt—are giving retailer some optimism.
Yet, as NRF’s chief economist, Jack Kleinhenz, pointed out, “Persistently high unemployment, an erratic stock market, modest income growth and rising consumer prices are all combining to impact spending this holiday season. How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel.”