US holiday sales set for worst gain in six years
Wednesday, 24 September 2008
NEW YORK, Sept 23 (Reuters): The tumultuous economic climate will constrain US holiday sales growth to its lowest level in six years and a turnaround is not likely until the second half of next year, a leading retail trade group forecast Tuesday.
The National Retail Federation expects 2008 US holiday sales, or retail industry sales in the months of November and December, to increase 2.2 per cent this year to $470.4 billion.
That would be the paltriest gain since sales rose 1.3 per cent in 2002, when a slumping economy, rising unemployment and the threat of a war with Iraq prompted consumers to cut spending.
"Everything is so volatile and so uncertain," said National Retail Federation Chief Economist Rosalind Wells in an interview Friday, adding that this year's holiday outlook was one of the most difficult to assemble in her 13 years of forecasting for the trade group.
"I haven't experienced a time where I've seen ... a crisis like this," she said.
Wells was developing her holiday forecast during one of the most chaotic weeks in Wall Street history, marked by the failure of Lehman Brothers, the government bailout of insurer American International Group, and Merrill Lynch agreeing to be acquired by Bank of America.
Even before last week's Wall Street shake-out, a bleak picture was emerging for the US holiday season, with some predicting sales growth would be the worst since 1991.
While the National Retail Federation forecast is not as dour as that, it can be hard to compare holiday forecasts because the forecasters measure holiday sales differently.
TNS Retail Forward expects 1.5 per cent growth for holiday retail sales, which would make it the worst holiday in 17 years. But the research firm defines holiday sales as those taking place during the fourth quarter.
Deloitte, which defines the holiday as November, December and January, expects sales to rise 2.5 to 3.0 per cent.
If holiday sales rise less than 2.9 per cent, it will be the smallest gain since 1991, according to Deloitte, but they could rise 2.9 per cent or more and still be the worst since 2002.
The National Retail Federation said a holiday sales gain of 2.2 per cent would fall well below the ten-year average of 4.4 per cent holiday sales growth.
"Consumers have been in a squeeze for many months now," Wells said.
The National Retail Federation expects 2008 US holiday sales, or retail industry sales in the months of November and December, to increase 2.2 per cent this year to $470.4 billion.
That would be the paltriest gain since sales rose 1.3 per cent in 2002, when a slumping economy, rising unemployment and the threat of a war with Iraq prompted consumers to cut spending.
"Everything is so volatile and so uncertain," said National Retail Federation Chief Economist Rosalind Wells in an interview Friday, adding that this year's holiday outlook was one of the most difficult to assemble in her 13 years of forecasting for the trade group.
"I haven't experienced a time where I've seen ... a crisis like this," she said.
Wells was developing her holiday forecast during one of the most chaotic weeks in Wall Street history, marked by the failure of Lehman Brothers, the government bailout of insurer American International Group, and Merrill Lynch agreeing to be acquired by Bank of America.
Even before last week's Wall Street shake-out, a bleak picture was emerging for the US holiday season, with some predicting sales growth would be the worst since 1991.
While the National Retail Federation forecast is not as dour as that, it can be hard to compare holiday forecasts because the forecasters measure holiday sales differently.
TNS Retail Forward expects 1.5 per cent growth for holiday retail sales, which would make it the worst holiday in 17 years. But the research firm defines holiday sales as those taking place during the fourth quarter.
Deloitte, which defines the holiday as November, December and January, expects sales to rise 2.5 to 3.0 per cent.
If holiday sales rise less than 2.9 per cent, it will be the smallest gain since 1991, according to Deloitte, but they could rise 2.9 per cent or more and still be the worst since 2002.
The National Retail Federation said a holiday sales gain of 2.2 per cent would fall well below the ten-year average of 4.4 per cent holiday sales growth.
"Consumers have been in a squeeze for many months now," Wells said.