After parents cut back on clothes and accessories for children this past fall, the retail industry suspects they won’t be any more generous by the holidays.
The National Retail Federation, usually bullish about holiday sales, predicts a 1 percent decline in total sales to $437.6 billion for November and December combined. The projection from the world’s largest retail trade group comes amid forecasts that U.S. retailers saw a key measure of sales drop in September for the 13th month in a row compared with a year earlier.
The NRF is less optimistic this year than several other groups offering holiday sales forecasts.
“We just don’t see a sharp turnaround in consumer sentiment and spending until employment and income look a lot better,” said Rosalind Wells, chief economist at the National Retail Federation. “Shoppers are going to remain very frugal.”
NRF’s figures exclude sales from restaurants, gasoline, autos and online business; they include low-price retailers, department stores, grocery stores and specialty stores.
Last year, the Washington-based NRF issued a 2.2 percent growth forecast in mid-September just as the financial meltdown ballooned. The trade group decided not to offer a reduced estimate because the spending climate was deteriorating so quickly that forecasters couldn’t be accurate. The industry ended up having the weakest holiday season — when compared with the previous year — since at least 1967, when the U.S. Commerce Department started collecting retail sales data.
So far, holiday 2009 forecasts range from as weak as a 3.5 percent decline from Wells Fargo senior economist Mark Vitner to predictions at the top end from Deloitte Research and TNS Retail Forward that sales will be the same as last year.
Job security is a key factor in consumers’ ability and willingness to spend, and the latest government jobs report, issued Friday, fueled more concerns about the holiday shopping season. The figures showed unemployment ticking up to 9.8 percent in September, a 26-year-high, and employers shedding 263,000 jobs, more than the 180,000 forecast by economists.
Those seeking work also have fewer prospects: The average time to find a job is 26.2 weeks, up from 19.8 weeks in January.
Meanwhile, shoppers continue to grapple with tight credit and dwindling net worth. (AP)
