Analysts optimistic despite so-so October
December 1, 2003,
Despite the laggard look to October's retail sales numbers, observers inside and outside of the industry are looking ahead to the coming holiday shopping season with a great deal of optimism.
Even with these declines, however, the signs point to a strong holiday shopping season. Rosalind Wells, chief economist with the National Retail Federation, noted that October sales for the GAFS category (general merchandise, clothing and accessory stores, furniture and home furnishings stores, electronics and appliances stores, and sporting goods, hobby, book and music stores) grew nearly 6 percent over the total from October 2002.
"The stage has been set for the holiday season and retailers are ready to perform," Wells said. NRF has forecast a 5.7 percent increase in 2003 holiday sales, and "October gains continue to reinforce our holiday forecast."
A recent Gallup poll discovered that more than half of Americans consider economic conditions "good" or "excellent," and that consumers are more willing to translate that glowing view of the economy into store checkouts than they have been since the Sept. 11 terrorist attacks.
A Bank One report on the retail sales numbers said, "We have never seen such an extraordinary confluence of private and public stimuli. Consumer and business demand is heating up, while government spending continues to grow. We expect the holiday shopping season to be quite good and with the employment picture looking better, we feel confident that fourth-quarter growth should be in the 4 percent range."
Gina Martin, economist with Wachovia Economics Group, commented, "We regard (the October retail sales report) as good news for the critical holiday sales season. Consumers have clearly loosened the purse strings and are out shopping again. Though we do not expect the frenetic pace of spending in the third quarter to continue in the fourth, consumers are likely to still spend a good deal this holiday season."
Most of the October decline in retail sales stemmed from a 1.9 percent drop in auto sales; taking cars out of the equation, U.S. retail sales gained 0.2 percent.