According to the National Retail Federation, total holiday retail sales are projected to grow by 5.7 percent over last holiday, bringing holiday spending to $217.4 billion.
NRF defines “holiday retail sales” as sales in November and December for retail stores in the GAFS category: general merchandise stores, clothing and clothing accessories stores, furniture and home furnishings stores, electronics and appliance stores, and sporting goods, hobby, book and music stores.
“After several strong months of retail sales growth, it seems clear that the economy is picking up momentum just in time for the holidays,” said NRF Chief Economist Rosalind Wells. “Retail sales gains for the 2003 holiday season will be far better than the meager increases retailers experienced a year ago.” Holiday sales in 2002 increased 2.2 percent to $205.6 billion.
Wells cites a variety of factors for this holidays substantial sales increase, including low interest rates, low inflation, rising equity markets, and mounting consumer confidence. Also, she said, consumers have more disposable income resulting from the withholding tax cut and child tax credit checks.
Additionally, business spending is a major factor contributing to this years holiday forecast. Retail spending by businesses on equipment and software jumped 8.0 percent at an annual rate in the second quarter following an extended period of weakness going back to 2000.
Wells said several nagging factors affecting sales growth include a sluggish job market, rising energy costs, and ever-present geopolitical concerns.
“Consumers have spent the last several years on an emotional and economic rollercoaster,” said NRF President and CEO Tracy Mullin. “Now, Americans appear to be ready to shop and ready to spend, just in time for the biggest shopping season of the year.” Last year, holiday retail sales made up 22.7 percent of total retail sales.
