Wednesday, October 5, 2011

Retailers expect modest rise in holiday sales

The National Retail Federation forecasts a 2.8% increase in revenue over last year, significantly lower than what the industry reported in 2010 but slightly higher than the 10-year average holiday sales increase of 2.6%.

Retail sales in the upcoming holiday shopping season will rise a modest 2.8% to $465.6 billion after a surprisingly solid Christmas last year, according to the National Retail Federation, a trade group.

That estimate is significantly lower than the 5.2% increase the industry reported in 2010, but it is slightly higher than the 10-year average holiday sales increase of 2.6%.

"The 2011 holiday season can be summed up in one word: average," the federation said in a statement.

Matthew Shay, president of the group, said that retailers were optimistic that strong promotions and lean inventory levels would help them deal with consumer caution during the all-important November and December period, when some retailers make as much as 40% of their annual revenue.

"While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009," he said.

Several economic factors could negatively affect the holidays this year, including continued uncertainty over the stock market, higher gas and food prices and a sluggish jobs picture.

Still, many shoppers continue to spend. The retail industry has posted 14 consecutive months of retail sales growth; major chain stores are scheduled to release September sales results Thursday.

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