Surveys See Halfhearted Holiday
James Mammarella -- Home Textiles Today, September 29, 2008
New York —A new crop of surveys foresee lackluster results for retailers — of home furnishings in particular — this holiday.
NRF: Holiday '08 at half the 10-year average
“Current financial pressures and a lack of confidence in the economy will force shoppers to be very conservative with their holiday spending,” said National Retail Federation chief economist Rosalind Wells.
Wells was commenting on the BIGresearch projection for holiday (November and December) spending of $470.4 billion. This 2.2% year-to-year rise is half the 10-year average of a 4.4% holiday sales increase, and would be the slowest since the 2002 1.3% rise.
Phil Rist, vp strategy at BIGresearch, said home furnishings in particular “is going to have some tough challenges … because of the challenges created by the housing market.”
TNS: Holiday weak, home décor weaker
Home furnishings stores, furniture retailers and home improvement centers as a group are likely to post a negative 1% year-to-year sales decline for the holiday quarter, said TNS Retail Forward. Retail as a whole is forecast for 1.5% fourth-quarter sales growth, TNS said, the lowest rate since 1991.
The worst retail fourth quarter in the past 10 years was the 2.2% sales uptick in 2001, TNS reported. Recent high points among fourth quarters include the 7.0% growth in 2005, and the 8.2% peak in 1999.
TNS said Q4 '08 will expand at mass merchants, in part due to higher food prices. “Supercenters and warehouse clubs will remain among the best retail performers while discount department stores will be the laggard.”
E-commerce sales are forecast to grow 9% — but that may be a disappointment, down from 19% in the year-ago holiday quarter. “This represents the first single-digit growth rate for online retailing during the holiday shopping season since 1999,” TNS said.
Forrester: E-commerce sites hope for momentum
Online retailers peering through the fog of the marketplace in some cases see better business ahead. According to “The State of Retailing Online 2008” from Forrester Research, 72% of online retailers believe that “the online channel is better suited to withstand an economic slowdown than offline channels.”
About one-third of the e-retailers surveyed said they expect better volume in the next 12 months, while another third anticipate current levels of business to be maintained.
Still, 37% of respondents have lowered expectations for their online business performance in the next 12 months.But 81% of online retailers had a profitable 2007, with 75% more profitable than in 2006.
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