The National Retail Federation reported that it anticipates holiday sales to increase by 4.0% to $474.5 billion for the 2007 season. However, with a growth rate of only 4.0%, this years sales increase will be below the ten-year average of 4.8% and would also be the slowest holiday sales growth since 2002, when sales increased only 1.3%.
The organization attributed its below average forecast to the weak housing market and credit crunch forcing consumers to be more cautious and prudent with their holiday spending.
Luxury retailers, NRF noted, once again appear to be a bright spot as their customers have demonstrated the ability to maintain high levels of spending. Clearly the retailers most affected by the economy will be those catering to the low to middle income consumer, which could spell trouble for discounters and some department stores whose shoppers may be looking to trade down, according to the NRF.
