Sales in the 2008 holiday season will rise just 2.2%, to $470.4 billion – well below the 10-year average of 4.4%, and the lowest growth level since 2002, when holiday sales* rose 1.3% from the previous year, according to the National Retail Federation (via Retailer Daily).
“Current financial pressures and a lack of confidence in the economy will force shoppers to be very conservative with their holiday spending,” said NRF Chief Economist Rosalind Wells. “We expect consumers to be frugal this season and less willing to splurge on discretionary items.”
Among the factors cited by NRF that will affect spending: A struggling housing market and rising unemployment accompanied by meager income gains will continue to hamper the consumer throughout the season; and food and energy costs will remain high.
With the current financial industry crisis continuing to chip away at consumer confidence, NRF said it does not foresee an economic turnaround until the second half of next year.
According to the NRF 2008 Holiday Survival Kit:
- For many traditional retailers, the holiday season can account for 25-40% of their annual sales. In 2007, holiday sales comprised 19.1% of total retail industry sales (including up to 30% for jewelry stores):
- In 2007, holiday sales grew 2.4% to $460.24 billion. On average, holiday sales have increased 4.4% per year for the last 10 years.
- NRF defines winter holiday sales as those taking place in the full months of November and December; the 2008 may be described as “short” because the number of days between Thanksgiving and Christmas is the second-shortest possible: 27 days (last year, there were 32).
* NRF defines “holiday sales” as retail industry sales in the months of November and December. Retail industry sales include most traditional retail categories, including discounters, department stores, grocery stores, and specialty stores, and exclude sales at automotive dealers, gas stations, and restaurants.