The Ernst & Young Retail and Consumer Products Group anticipates that the 2004 retail holiday sales increase for November and December will be 6%, compared with a 5.7% increase for the same period last year.
“We are projecting a strong season but there are several factors that could limit growth,” says Jay McIntosh, Americas Director of Retail and Consumer Products for Ernst & Young LLP. “Since September, when we issued a preliminary forecast of 6 to 7 percent growth, energy prices have continued to rise while job creation and income growth have slowed, making low-income consumers more cautious. Affluent consumers will drive the growth this year, which should be reflected in strong sales at upscale retailers, but even high-income consumers could tighten their purse strings if there is a significant drop in the stock market. Consumers will find good values in two of the biggest holiday categories. Toys and electronics should be deflationary because of weak demand and increased competition. Apparel is the wild card – the weather, distribution costs, and year-end quotas could push prices up or down.”
The Ernst & Young Holiday Forecast is based on 13 years of data, including stock market performance, consumer confidence, unemployment rates and historical relationships between retailers and their customers.
