Published: October 6 2010 05:10 | Last updated: October 6 2010 05:10 The National Retail Federation, the largest US retail industry group, has said it expects to see a 2.3 per cent increase in holiday sales this year, with retailers battling to lure shoppers still sharply focused on stretching their dollars.
The forecast increase, to $447.1bn in November and December, is lower than the average 2.5 per cent rise seen in the holiday periods over the past 10 years. It contrasts with the 0.4 per cent rise seen at the end of last year and the 3.9 per cent drop seen at the end of 2008 following the collapse of Lehman Brothers.
Jack Kleinhenz, chief economist at the NRF, said US consumers had shown they were again willing to spend on things they wanted. But “they will still be very conscientious about what they buy and how much they buy”, he said. “Retailers will have to convince shoppers the recession is over.”
A number of retailers have already unveiled moves aimed at driving sales during the holidays.
Toys R Us, the largest US toy retailer; Sears, the department store; and Kmart, the discounter, have all launched Christmas savings clubs, offering customers a 3 per cent bonus on money they set aside for holiday spending. Target, the mass discounter, is preparing to launch a 5 per cent discount offer for all purchases on its store credit and debit cards, which it predicts will boost fourth-quarter sales by 1 percentage point.
Best Buy, the largest consumer electronics retailer, is launching new financing arrangements for bundles of purchases.
Gerald Storch, chief executive of Toys R Us, has said he expects the toy category to again outperform the rest of the retail industry, following the 3.9 per cent increase in comparable sales that his US stores reported during last year’s nine-week holiday sales period. “People will spend for hot toys ... The last thing they cut back on is toys for kids,” he said.
Toys R Us has begun opening 600 small, temporary “pop-up” stores in shopping precincts and plazas.
Brian Dunn, chief executive of Best Buy, has said that while “we know it’s a tough environment out there”, the retailer would deliver extra value with services such as a free 24-hour holiday helpline.
Separately, the International Council of Shopping Centers said it expected to see its index of comparable sales at leading chain stores increase by 3 to 3.5 per cent, the strongest growth since 2006. The index rose 2.3 per cent last year.
Michael Niemira, chief economist at the ICSC, said the group expected stronger holiday hiring and overall employment growth to support increased spending.
