Forecast: 2011 Holiday Sales to Increase of 2.8% to $465.6 Billion
Oct 19, 2011
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The National Retail Federation expects retail sales during the 2011 holiday season to be "average" and predicts retail will hire of about a half-million seasonal workers.
A holiday season with average sales could be a disappointment after 2010's holiday season, which did better than most expected.
NRF forecasts holiday retail sales in 2011 to increase 2.8% to $465.6 billion – down from the 5.2% increase in 2010 but still slightly higher than the 10-year average holiday sales increase of 2.6%. NRF defines “holiday sales” as retail industry sales in the months of November and December. It include most traditional retail categories including discounters, department stores, grocery stores, and specialty stores, and excludes sales at automotive dealers, gas stations, and restaurants.
“Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season,” said NRF President and CEO Matthew Shay. “While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009.”
NRF points out that there are several signs of economic strength as well as potential problems for retail sales in the last two months of 2011. On the plus side are positive economic indicators such as 14 consecutive months of retail sales growth and reduced household debt.
“Just when you think the U.S. economy is turning around, another factor comes into play that changes the game,” said NRF Chief Economist Jack Kleinhenz, Ph.D. “Persistently high unemployment, an erratic stock market, modest income growth and rising consumer prices are all combining to impact spending this holiday season. How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel.”
Additionally, year-over-year gains in the 2010 holiday season will create more difficult comparisons for retailers in 2011.
NRF used its holiday forecasting model to create a projection for seasonal hiring in retail – the first time it has made such a forecast. NRF expects retailers to hire between 480,000 and 500,000 seasonal workers this holiday season, compared to 495,000 seasonal employees hired in the 2010 holiday season.
The organization pointed out that, while most retailers bring in additional employees during the holiday season to account for an uptick in traffic and sales, retailers have also been hiring throughout the last year: since August 2010 the retail industry has added nearly 100,000 jobs.
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