The National Retail Federation released its 2009 holiday forecast, projecting holiday retail industry sales to decline 1% this year to $437.6 billion. While this number falls significantly below the ten-year average of 3.39% holiday season growth, the decline is not expected to be as dramatic as last year’s 3.4% drop in holiday retail sales nor as severe as the 3.0% 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.”
