Reuters
According to a new Accenture survey, 69 percent of shoppers plan to do the bulk of their holiday shopping by Dec. 7. That’s up from 60 percent a year earlier.
More than half (52 percent), plan to shop on Black Friday (the day after Thanksgiving), up from 42 percent last year.
The game of chicken between retailers and shoppers over discounts may be more intense this year after retailers had to practically give the store away in 2008 to clear inventory in the middle of the recession.
The vast majority of consumers (86 percent) will not be moved to buy without a discount of at least 20 percent, and a quarter of shoppers will be looking for an aggressive 50 percent discount before they open their wallets, the survey said.
“We have seen a ’shift to thrift’ across all income levels during this economic downturn and breaking that habit will be the greatest challenge for retailers this holiday season,” Janet Hoffman, managing director of Accenture’s Retail practice, said in a news release.
Gift cards may also come back, with 79 percent of people saying they will give them and 59 percent saying they really want them. Many people would rather receive the equivalent of cash this year and shop for their own needs, including tree storage bags.
More than half (52 percent), plan to shop on Black Friday (the day after Thanksgiving), up from 42 percent last year.
The game of chicken between retailers and shoppers over discounts may be more intense this year after retailers had to practically give the store away in 2008 to clear inventory in the middle of the recession.
The vast majority of consumers (86 percent) will not be moved to buy without a discount of at least 20 percent, and a quarter of shoppers will be looking for an aggressive 50 percent discount before they open their wallets, the survey said.
“We have seen a ’shift to thrift’ across all income levels during this economic downturn and breaking that habit will be the greatest challenge for retailers this holiday season,” Janet Hoffman, managing director of Accenture’s Retail practice, said in a news release.
Gift cards may also come back, with 79 percent of people saying they will give them and 59 percent saying they really want them. Many people would rather receive the equivalent of cash this year and shop for their own needs, including tree storage bags.
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From Investor's Business Daily
Retailers won't uncork much champagne this holiday season, as worries over jobs and the economy likely will take a lot of the cheer out of gift buying.
But at least things won't be as gloomy as they were a year ago, when leading U.S. retailers suffered their worst Christmas since at least 1970.
Business has already picked up heading into the holiday season. Last month, same-store sales at leading U.S. retail chains rose 1.1% vs. the prior year, says Ken Perkins president of Retail Metrics. It was the first monthly gain since August 2008.
It also looks like leading retailers' earnings will grow this quarter after nine straight quarters of declines, Perkins says. He estimates that chains are set to see Q3 earnings grow 23.6% vs. 2008. Last year, Q4 earnings sank 26.6%.
Meanwhile, analysts expect retailers' Q4 same-store sales to rise 0.7%, says Jharonne Martis, director of consumer research at Thomson Reuters.
Flat Christmas
But holiday shoppers aren't likely to give stores much of a boost.
Overall Christmas sales should slip 1% to $437.6 billion, says Rosalind Wells, chief economist at the National Retail Federation. That's far better than 2008's 3.4% drop, but nothing to write home about.
It would be the first back-to-back decline in holiday sales since 1992, when the NRF started tracking such figures.
"The Grinch won't have a starring role this Christmas, but he will be lurking in the background," Perkins said. "There are still significant head winds to consumer spending this year."
Those head winds include rising unemployment, which recently hit a 26-year high of 9.8%. Other worries include stagnant home values and burdensome credit card debt.
On the bright side, retailers face easy comparisons with last year's grim results.
"I would anticipate an improving, though still challenging, season," said Michael Niemira, chief economist at the International Council of Shopping Centers.
He figures Christmas same-store sales will rise 1% from a year ago. That's not much of an increase, but it's at least better than last year's woeful 5.8% decline — and better than what retailers saw for much of 2009.
"As with most recoveries, the retail recovery has been very uneven and very sporadic," Niemira said. "We're starting to see numbers on the positive side."
He also expects the consumer mood to improve as the holiday season approaches.
Q3 GDP data out next week will confirm that the recession is over, which should have a favorable impact on consumer confidence.
Also on the plus side, the stock market rally has helped some consumers increase their net worth.
Marshal Cohen, chief industry analyst at the NPD Group, expects consumers to come out of hiding over the holiday as they give in to pent-up demand.
"The consumer, who hasn't shopped all year, is starting to show signs of life," he said.
Lean Budgets, Inventory
But overall, shoppers will keep budgets tight this Christmas. Consumers plan to spend an average of $682.74 on holiday gifts this year, according to an NRF survey conducted by BIGresearch. That's down 3.2% from last year.
Retailers are keeping inventories tight as well. Doing so makes it less likely they'll have to slash prices to clear out unsold goods — a move that devastated the industry last Christmas.
This year chains will need to offer discounts of 35% to 40% to drive traffic, Perkins says. That's far less than the 70% off deals they offered last Christmas.
Wal-Mart has continued its aggressive holiday pricing this year. On Sept. 30, the world's biggest retailer started selling more than 100 popular toys, such as Barbie Cut and Style Rapunzel doll, at $10.
The next day, rival Target began offering discounts of up to 50% on popular toys such as Barbie Fashion doll, which goes for $5.
Wal-Mart, Target and Amazon have begun a high-profile online book price war, offering a few key titles for pre-order at about $9.
Wal-Mart on Wednesday began offering weekly deep savings events and new everyday prices on thousands of items through the holidays.
Holiday consumers likely will continue their quest for bargains at value retailers. In the NRF survey, more than half of shoppers said sales and price discounts or everyday low prices would be the most important factor when deciding where to shop at Christmas.
"We're still seeing shoppers very deal focused," said Frank Badillo, senior economist at Retail Forward. "They continue to trade down in terms of brands and the store types."
Dollar stores and discounters will rule the holiday, as they have all year.
Retailers won't uncork much champagne this holiday season, as worries over jobs and the economy likely will take a lot of the cheer out of gift buying.
But at least things won't be as gloomy as they were a year ago, when leading U.S. retailers suffered their worst Christmas since at least 1970.
Business has already picked up heading into the holiday season. Last month, same-store sales at leading U.S. retail chains rose 1.1% vs. the prior year, says Ken Perkins president of Retail Metrics. It was the first monthly gain since August 2008.
It also looks like leading retailers' earnings will grow this quarter after nine straight quarters of declines, Perkins says. He estimates that chains are set to see Q3 earnings grow 23.6% vs. 2008. Last year, Q4 earnings sank 26.6%.
Meanwhile, analysts expect retailers' Q4 same-store sales to rise 0.7%, says Jharonne Martis, director of consumer research at Thomson Reuters.
Flat Christmas
But holiday shoppers aren't likely to give stores much of a boost.
Overall Christmas sales should slip 1% to $437.6 billion, says Rosalind Wells, chief economist at the National Retail Federation. That's far better than 2008's 3.4% drop, but nothing to write home about.
It would be the first back-to-back decline in holiday sales since 1992, when the NRF started tracking such figures.
"The Grinch won't have a starring role this Christmas, but he will be lurking in the background," Perkins said. "There are still significant head winds to consumer spending this year."
Those head winds include rising unemployment, which recently hit a 26-year high of 9.8%. Other worries include stagnant home values and burdensome credit card debt.
On the bright side, retailers face easy comparisons with last year's grim results.
"I would anticipate an improving, though still challenging, season," said Michael Niemira, chief economist at the International Council of Shopping Centers.
He figures Christmas same-store sales will rise 1% from a year ago. That's not much of an increase, but it's at least better than last year's woeful 5.8% decline — and better than what retailers saw for much of 2009.
"As with most recoveries, the retail recovery has been very uneven and very sporadic," Niemira said. "We're starting to see numbers on the positive side."
He also expects the consumer mood to improve as the holiday season approaches.
Q3 GDP data out next week will confirm that the recession is over, which should have a favorable impact on consumer confidence.
Also on the plus side, the stock market rally has helped some consumers increase their net worth.
Marshal Cohen, chief industry analyst at the NPD Group, expects consumers to come out of hiding over the holiday as they give in to pent-up demand.
"The consumer, who hasn't shopped all year, is starting to show signs of life," he said.
Lean Budgets, Inventory
But overall, shoppers will keep budgets tight this Christmas. Consumers plan to spend an average of $682.74 on holiday gifts this year, according to an NRF survey conducted by BIGresearch. That's down 3.2% from last year.
Retailers are keeping inventories tight as well. Doing so makes it less likely they'll have to slash prices to clear out unsold goods — a move that devastated the industry last Christmas.
This year chains will need to offer discounts of 35% to 40% to drive traffic, Perkins says. That's far less than the 70% off deals they offered last Christmas.
Wal-Mart has continued its aggressive holiday pricing this year. On Sept. 30, the world's biggest retailer started selling more than 100 popular toys, such as Barbie Cut and Style Rapunzel doll, at $10.
The next day, rival Target began offering discounts of up to 50% on popular toys such as Barbie Fashion doll, which goes for $5.
Wal-Mart, Target and Amazon have begun a high-profile online book price war, offering a few key titles for pre-order at about $9.
Wal-Mart on Wednesday began offering weekly deep savings events and new everyday prices on thousands of items through the holidays.
Holiday consumers likely will continue their quest for bargains at value retailers. In the NRF survey, more than half of shoppers said sales and price discounts or everyday low prices would be the most important factor when deciding where to shop at Christmas.
"We're still seeing shoppers very deal focused," said Frank Badillo, senior economist at Retail Forward. "They continue to trade down in terms of brands and the store types."
Dollar stores and discounters will rule the holiday, as they have all year.
The vast majority of consumers (86 percent) will not be moved to buy without a discount of at least 20 percent, and a quarter of shoppers will be looking for an aggressive 50 percent discount before they open their wallets
Analysts polled by Thomson Reuters estimate the big winners will include off-price clothier Ross with a projected 5.6% same-store sales gain during Q4; and off-price retailer TJX, with a 5.4% rise.
They expect Dollar Tree's Q4 comps to rise 4.7%, and Family Dollar's to climb 4.2%.
Even department stores might rebound from recent depressed levels. High-end chains, such as Saks and Nordstrom could show modest improvement, Perkins says.
Also, while unemployment continues to move higher, weekly jobless claims have come down sharply from their peak earlier in the year.
"That foreshadows improvement down the road, though it may be another six months before we start to see job growth and the rate starting to fall off," Badillo said.
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From the Business Insider
Research Firms Predict Sad Christmas
Most of the major predictions are now in for the holiday shopping season. Here we’ve put together a roundup of what various trade associations and research outlets are predicting. Projections range a bit this year. Some groups are calling for a slight decline, other say sales will be flat and some say sales will show a slight uptick.
In part, the differences stem from the different way the groups look at the numbers. ICSC and Retail Forward, for example, looks at same-store sales while the National Retail Federation looks at total sales. For its part, Deloitte is working off Commerce Department data. NPD bases its projection on surveys it completes. And ShopperTrak’s metrics are based off its proprietary foot traffic counts. Collectively, the data gives a fairly well-rounded picture of what the experts are expecting to see for the critical season.
The bottom line is that all the groups expect the season to be stronger than 2008’s disastrous holiday shopping season, but the recovery will be modest.
ICSC
The association has not yet put up its Holiday Watch page for 2009. But it has released its forecast.
The ICSC expects same-store sales, or sales at stores open at least a year, for the “traditional” holiday shopping season of November and December to rise 1 percent. Same-store sales for the “new” holiday season of November though January are expected to rise 1.5 percent, it said.
A year ago, the ICSC said same-store sales in November and December fell 5.8 percent, while they dropped 5.4 percent for the November though January time frame.
National Retail Federation
The NRF looks at total sales rather than same-store sales. The association’s Holiday Headquarters is up and running. The association predicts retail industry sales to decline 1 percent this year to $437.6 billion. Last year, its numbers indicated sales fell 3.4 percent.
The National Retail Federation today released its 2009 holiday forecast, projecting holiday retail industry sales to decline one percent this year to $437.6 billion.* While this number falls significantly below the ten-year average of 3.39 percent holiday season growth, the decline is not expected to be as dramatic as last year’s 3.4 percent drop in holiday retail sales nor as severe as the 3.0 percent decline in annual retail industry sales expected for all of 2009.
Deloitte
Deloitte’s predictions are that holiday sales will be flat.
Deloitte’s Retail group expects total holiday sales to reach $810 billion, which would represent a zero percent change in November – January holiday sales, excluding motor vehicles and gasoline, over last year. This would be an improvement over last season’s 2.4 percent decrease, the first decline in holiday sales according to Deloitte’s analysis of Commerce Department data dating back to 1967.
Retail Forward
Like ICSC, Retail Forward looks at same-store sales. The research group is forecasting flat growth—compared with a 4.5 percent decline a year ago—for the holiday fourth quarter in the key holiday retail segments combined.
In looking at some of the highlights, the group says:
* Sales at apparel and accessories channels are forecast to decline about 2% during the fourth quarter holiday period compared with a more than 9% drop last year. Most of the continued decline will be at department stores which continue to feel the brunt of a combination of economic, competitive and demographic trends.
* The broad group of mass retailers that includes discount department stores, supercenters, warehouse clubs and small-format value stores is forecast to grow sales 2.5% this holiday season. This is an increase from 2.0% a year ago.
* The homegoods channel, featuring home products like Christmas tree bags, will see sales decline more than 2% compared with a 7.4% decline last year. Consumer electronics stores will experience the biggest decline in part due to Circuit City’s exit. Building and home improvement retailers will see sales declines ease to -2.0%. This channel is expected to be the first to benefit from improvements in the housing market and is forecast to see slight sales gains emerge in early 2010.
ShopperTrak
Shopper Trak, which specializes in traffic counting software, is the most recent group to offer a prediction.
The group predicted:
[T]otal holiday sales will rise 1.6 percent compared with a year ago, which would be good news for retailers compared with last year’s steep decline.
The research firm also expects a 4.2 percent decline in foot traffic from last year’s holidays.
Last year, holiday sales fell 5.9 percent while foot traffic dropped 15.4 percent, according to ShopperTrak estimates. The research firm tracks customer traffic at more than 45,000 stores.
The NPD Group
The NPD Group published its outlook a week ago. Its survey of neither 2,000 shoppers showed that 30 percent planned to spend less than last year–a four percentage point increase from the number that gave that response a year ago. A chart at the site also lists the top 10 categories consumers plan to target for gifts and how the responses compare with 2008.
“That 4 percent increase is certainly a sign of the times. On the other hand, that 4 percent is not as dramatic as it could have been.” said Marshal Cohen, chief industry analyst, The NPD Group, Inc. “I think consumers will be looking for the right gift, rather than the most extravagant or expensive one. That combined with the soft numbers we are up against from holiday last year, and I think we will see growth, albeit a modest 0.5 to 1.5 percent.”
It is the 0.5 to 1.5 percent growth that takes us ‘back to the future’ and to holidays past when growth rates of 5 percent or more were unheard of and unexpected. For Holiday 2009, not only will actual spending levels go ‘back to the future’ but the kinds of gifts being bought will ‘go back’ to more traditional holiday gift items.
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And, From Market Watch, a look at Wal Mart's upcoming holiday season
In a move that could spark a retail price war and weigh on the sector's earnings, Wal-Mart on Wednesday announced a wide range of price cuts on items in its stores ranging from low-end meat to children's toys.
Wal-Mart said that "weekly deep savings events and new everyday low prices" will start today and run through the holiday period, eventually adding up to hundreds of millions of dollars of savings. Items include
"Many of these prices represent the lowest we've offered in years, because we know these are tough times for American families," said Eduardo Castro-Wright, vice chairman of Wal-Mart Stores, in announcing the reductions. "We made a purposeful decision to focus initially on everyday staples as well as items that often require larger spending commitments in preparation for Thanksgiving and Christmas."
Among the items on offer will be rolls of 73% lean ground beef at $1.25 a pound, a cut of 26% and bananas at 39 cents a pound, down 27%. Also trimmed are vitamins, board games, and Hot Wheels, with cuts ranging from 17% to 60%.
And this season, Wal-Mart is selling 100 toys for $10 or less. At the same time, the company is in the process of expanding its store-brand line of foods and everyday household items. In the future, this project is expected to push lower-tier products off Wal-Mart's shelves.
The economic slowdown and sky-high unemployment has hit the American consumer hard, weighing heavily on retail sales and bringing worries that this holiday shopping season could be one of the worst in years.
And John Fleming, chief merchandising officer, told Bloomberg News that the company expects a "tough" holiday shopping season with consumers delaying purchases.
Investors did not take the news well. Shares of Wal-Mart, which traded up most of the day, went south shortly after the announcement.
Among the items on offer will be rolls of 73% lean ground beef at $1.25 a pound, a cut of 26% and bananas at 39 cents a pound, down 27%. Also trimmed are vitamins, board games, and Hot Wheels, with cuts ranging from 17% to 60%.
And this season, Wal-Mart is selling 100 toys for $10 or less. At the same time, the company is in the process of expanding its store-brand line of foods and everyday household items. In the future, this project is expected to push lower-tier products off Wal-Mart's shelves.
The economic slowdown and sky-high unemployment has hit the American consumer hard, weighing heavily on retail sales and bringing worries that this holiday shopping season could be one of the worst in years.
And John Fleming, chief merchandising officer, told Bloomberg News that the company expects a "tough" holiday shopping season with consumers delaying purchases.
Investors did not take the news well. Shares of Wal-Mart, which traded up most of the day, went south shortly after the announcement.
