Holiday Growth to Slow
By Staff -- Gifts and Dec, 9/11/2006 1:24:00 PM
Columbus, OH —Retail Forward forecasts 5.5 percent year-over-year growth in the fourth quarter for holidays sales. This is down from last year’s 7.2 percent gain and slightly below the average holiday growth rate since 1995.
Included in the forecast are home improvement stores, catalogs, online sales and general merchandise stores such as conventional and discount department stores, supercenters and warehouse clubs; apparel stores; furniture, home furnishings and consumer electronics stores; and other specialty stores.
"One of the most notable dimensions of the 2006 holiday period will be the transition of the homegoods channels from sales leaders to sales laggards," said Frank Badillo senior economist for Retail Forward, which attributes the trend to slowing housing sales. Retail Forward also expects softgoods and traditional department stores to remain slow, while supercenters and warehouse clubs and online sales stay strong. And though Retail Forward expects online sales to grow almost 23 percent to $33 billion in the fourth quarter, thatstill represents only a 3 percent share of all retail sales.
Retail Forward expects supercenters to see double-digit growth in part due to rising gas prices; the same factor will slow dollar store growth as it hurts low-income shoppers. The company expects apparel and accessories to remain healthy and jewelry sales to be boosted by higher prices.
"The holiday won't feel the worst effects from the lagging impact of higher interest rates, a slowing housing market and high fuel prices," says Badillo. "The worst will probably be felt in the first half of 2007."
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