Get your inventory ready: Researchers predict 'robust' holiday retail sales

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Consumers are getting a little more optimistic about their economic situations, and that means they may be spending more this holiday season, according to IHS Global Insight researchers.

The Reuters/University of Michigan Consumer Sentiment Index increased last month by 3.9 points to 71.6, the highest level since June. What does this mean? "The November reading is pointing to some momentum in consumer optimism," and that translates into increased propensity to buy, according to Chris Christopher, economist at IHS Global Insight.

"The increase in consumer optimism is good news for retailers, since holiday sales for many retail outlets are crucial," he says.

The November reading "points to relatively robust holiday retail sales this year," he adds. In fact, the researchers at IHS are predicting retail sales to be 4.5 percent higher than they were during the 2009 holiday season.

"Consumers have become more optimistic in their outlook and current situation," Christopher notes. "This increased optimism is being driven by relatively good news on the employment front, increasing stock market prices and relatively low interest rates.

This is an end-of-year uptick in consumer sentiment. Although it had gained momentum during the first half of the year, it fell dramatically over the summer.

Some other findings from the November Index:

- Consumer opinions on current economic conditions increased 5.5 points from October, to 82.1, the highest level since June.

- Buying conditions for durable goods (a key indicator for powersports-related sales) increased to 131 in November from 119 in October. This is also the highest level since June.

The Thomson Reuters/University of Michigan Consumer Sentiment Index measures consumer confidence on a monthly basis by conducting at least 500 telephone interviews each month with consumers across the United States. The Index, which was developed in the 1940s, was normalized at a value of 100 in December 1964.