11/14/2010

Retailers: The Bipolar Holiday Sales Season

The surveys are in and the verdict is...bipolar. Retailers are expecting a holiday season with heavier spending in the luxury market and lighter spending at chain stores. Consumers with an annual income under 50k are expecting to spend 1.2% less than last year. +50k income earners are expecting to spend 2.9% more than last year. This increased demand forecast is pushing luxury retailers like Coach and Nordstrom to stock their shelves a little deeper this year. The chain stores like Wal-Mart and J.C. Penny are having to fight a little harder for their business this year. I don't know what strategies we are going to see this holiday season from the chain stores, but they are going to have to do something more this year to coax consumers.
This sounds like a good topic to research for a comment or another post...

4 comments:

delta said...

I think a lot is hinging on the Holiday shopping season this year. From the reports I have been hearing, it sounds like consumer confidence is up. I am no expert but it seems to me that a good shopping season will do more than the minimal benefit being predicted from the quantitative easing from the fed.

Vladimir said...

Almost every report I have seen predicts an increase in sales around 2-2.5 percent. Many economists suggest that this increase will not be felt as strong as many are hoping. Businesses will need to be very successful with their marketing in order to capture the increased market share.

http://www.cnbc.com/id/39398775/Retailers_Need_Promo_Mojo_to_Survive_Holiday_2010

I think that we will see a slight decrease in the unemployment rate because of the temporary hirings that stores will do over the holidays. Unfortunately, I don't think we will see any signs that consumers confidence is rising for the long term. By mid January, I think we will see consumer spending back down to where we were before the holidays. Unemployment will also decrease.

Ralphie said...

I think people are still concerned with the overall state of the economy and will continue to hold off on major holiday spending this year. With the downplaying of the overall economy which came with the election this year, and with such high unemployment, people are still hesitant to open their pocketbooks. Next year, however, with the lack of a major election, and with progress (hopefully) in the uptick of the economy, people will be more comfortable with spending.

Dave said...

Gosh. Why should we even be worried about sales growth? Shouldn't we be worried about profit growth?

Obviously, the information on profit growth is a bit harder to figure out. But still ...

Incomes have been rising in the 2-3% per year range for about 15 months. And we're expecting sales to go up by 2-3%. And ... we care because?

None of this makes this a bad set of posts or comments, but you've got to wonder if this is the level of business reporting, news, and discourse that you've got to draw from. Should something like this really be primary in our discussions?

Vladimir: unemployment rates are seasonally adjusted so that there are no dips and rises for people to complain about from regular seasonal hiring.