Slower sales predicted for holiday 2007
By Staff -- Gifts and Dec, 9/25/2007 3:02:00 PM
WASHINGTON—The National Retail Federation is predicting total retail industry holiday sales in all product categories will rise 4.0 percent this year, its slightest gain since 2002.
“Retailers are in for a somewhat challenging holiday season as consumers are faced with numerous economic obstacles,” said NRF’s chief economist, Rosalind Wells. “With the weak housing market and current credit crunch, consumers will be forced to be more prudent with their holiday spending.”
The 2007 holiday sales increase is expected to fall below the 10-year average of 4.8 percent. It would represent the slowest holiday sales growth since 2002, when sales rose 1.3 percent. Total sales during the term NRF considers the “holiday season,” November and December, are expected to reach to $474.5 billion.
Luxury retailers are expected to be best off as their customers have the ability to maintain high levels of spending, while the retailers most affected by the economy will be those catering to the low to middle income consumer. This could spell trouble for discounters and some department stores whose shoppers may be looking to trade down, according to NRF analysts.
NRF will release its first in a series of holiday surveys on October 16, polling consumers on where they will shop and how much they plan to spend.
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