Sep 17, 2013
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US holiday sales expected to rise less than last year

Sep 17, 2013

Sales at U.S. stores are expected to climb less this holiday season than in recent years as consumers remain cautious during a slow economic recovery, a forecast released Tuesday by research firm ShopperTrak showed.

Sales are forecast to rise only 2.4 percent in November and December compared with increases of 3 percent in 2012, 4 percent in 2011 and 3.8 percent in 2010.

Store visits are expected to fall 1.4 percent during those months, according to ShopperTrak, which provides some of the earliest predictions about the U.S. holiday shopping season. Traffic rose by 2.5 percent in 2012 after falling 3.1 percent in 2011.

"Although the economy continues to recover slowly, consumers remain cautious about spending and are not ready to splurge," ShopperTrak Founder Bill Martin said in a statement.

In the latest Ipsos polling conducted for Reuters, about a third of consumers said they would be spending less this year than last on electronics, toys and jewelry. Additionally, 27 percent plan to spend less on clothes.

ShopperTrak makes sales projections based on its measurement of shopper visits to thousands of retail locations around the United States.

The forecast looks only at sales at physical U.S. stores. Online sales, which represent about 7 percent of overall U.S. retail sales, are not included.

Many retailers have been reporting lackluster sales despite the U.S. unemployment rate dropping to 7.3 percent in August, and the stock market climbing this year, with the Dow Jones Industrial Average near record highs.

The Thomson Reuters/University of Michigan's index of consumer sentiment fell 5.3 points to 76.8 in early September, the lowest since April. A Commerce Department report showed that U.S. retail sales rose just 0.2 percent in August as shoppers spent on automobiles and home goods, and cut back on clothing.


ShopperTrak and others expect the holiday rush to come earlier this year than usual because there is one fewer weekend between Thanksgiving and Christmas and six fewer days between the holidays. Also, the Jewish holiday of Hanukkah will begin the night before the Nov. 28 Thanksgiving holiday, though that shift alone is not expected to have a major impact on overall sales patterns.

Some stores have already started competing. Costco Wholesale Corp, the largest warehouse club chain, has had items such as nativity scenes, toys and holiday wrapping paper on display since August.

Wal-Mart Stores Inc, the world's largest retailer, started cutting prices on toys last week, and promised to cut more if necessary. Sears Holding Corp's Kmart chain already aired its first holiday commercial.

Issues such as Syria, healthcare costs, and higher payroll taxes and gasoline prices weigh on the minds of customers, which may alter some of their spending in between holidays, Walmart U.S. Chief Executive Officer Bill Simon said last week at the Reuters Global Consumer and Retail Summit in New York.

On Monday, Sue and Dennis George of Buffalo, New York, shopped for Christmas gifts at the Toys R Us store in Times Square.

"We do almost all the shopping online now because we get free shipping and I can find all the good deals," Sue George said. "But I still find bargains in stores."

The Georges said they expect to spend more than previous years, in part because they have another grandchild this year and because their business providing entertainment at corporate events and parties did better in the first half of 2013 than any other year.

"We're starting early to hit the sales," she said.

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