The National Retail Federation projects holiday retail industry sales to decline one percent this year to $437.6 billion. While this number falls significantly below the 10-year average of 3.39 percent holiday season growth, the decline is not expected to be as dramatic as last year’s 3.4 percent drop in holiday retail sales nor as severe as the 3.0 percent decline in annual retail industry sales expected for all of 2009.
“As the global economy continues to recover from the worst economic crisis most retailers have ever seen, Americans will focus primarily on practical gifts and shop on a budget this holiday season,” said NRF chief economist Rosalind Wells.
Though some hopeful signs of a recovery have begun to emerge, like better-than-expected sales in August and momentum in the stock market, continued consumer uncertainty over job security and housing values will take a toll on spending this holiday season. And, as retailers become even more promotional, certain popular holiday categories like apparel and electronics may experience deflation due to aggressive sales.
“The expectation of another challenging holiday season does not come as news to retailers, who have been experiencing a pullback in consumer spending for over a year,” said NRF president and CEO Tracy Mullin. “To compensate, retailers’ focus on the holiday season has been razor-sharp with companies cutting back as much as possible on operating costs in order to pass along aggressive savings and promotions to customers.”
NRF defines “holiday sales” as retail industry sales in the months of November and December. Retail industry sales include most traditional retail categories including discounters, department stores, grocery stores, and specialty stores, and exclude sales at automotive dealers, gas stations, and restaurants.
Holiday retail sales for the past four years have been revised based on revisions from the U.S. Department of Commerce. The most up-to-date numbers from previous holiday season sales numbers and growth can be found on page 6 of NRF’s Holiday Survival Kit (click here).