TNS Retail Forward: Rebate to Boost Retail Sales
By Staff -- Gifts & Decorative Accessories, 4/29/2008 10:38:00 AM
Columbus, OH — Management consulting and market research firm TNS Retail Forward is forecasting that retail sales growth will improve by as much as 3 percentage points in the third quarter and half that much by the end of the current quarter. TNS estimates that households will spend as much as $42 billion — almost half of the $105.7 billion tax rebate total — at retail stores from May through year end, with most of the spending occurring in the third quarter.Even still, growth is not expected to be high: year-to-year for the second quarter. Growth is forecast at 3.5 percent with the tax rebates, compared with 2 percent without.
“Retailers and suppliers should maximize their efforts to benefit from the tax rebates because growth prospects otherwise look bleak through the end of the year,” comments Frank Badillo, senior economist at TNS Retail Forward. “While the impact of the tax rebates is significant, it is unlikely that these rebates will lead to a sustained economic rebound.”
TNS research indicates that down-market to mid-market shoppers will remain focused on value and everyday purchases. Mid-to-up-market households will be more inclined to make big ticket purchases, which will likely benefit sales of consumer electronics and some home furnishings. TNS Retail Forward expects home goods sales to remain weak while discount department stores, warehouse clubs and other value-focused retailers fare best, and softgoods results will be mixed.
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