Washington—It’s beginning to feel a lot more like Christmas at retail—especially if the National Retail Federation (NRF)’s latest projection holds true. With just 10 days to go until Christmas, the NRF today revised its holiday sales projection upward.
On Oct. 6, the NRF predicted total retail sales would rise 2.8% in the November-December holiday season, a more modest increase than the 5.2% increase in holiday 2010. Now the NRF revised its forecast to a 3.8% increase, which is “considerably above the 10-year average sales increase of 2.6%.” Total sales are expected to hit a record $469.1 billion.
“After strong sales reports in October and November, along with a successful Black Friday weekend, retailers are cautiously optimistic that this season will turn out better than initially expected, bringing added stability to our recovering economy at a time when America needs it most,” said Matthew Shay, NRF’s president said. “However, a number of factors, including the debt crisis in Europe and continued political wrangling inWashington, could impact consumer spending this holiday season and into 2012.”
Most Americans Still Have to Finish Their Holiday Shopping
The revision follows two more promising factors that could affect a stronger sales showing for holiday. First, the NRF said Tuesday that its calculations for November retail sales showed a 4.5% year-over-year increase. And in its holiday intentions survey, NRF found that most American shoppers have completed far less of their holiday shopping than in previous years, and much of the Black Friday-related shopping was for self purchase rather than gift giving.
According to the NRF’s 2011 Consumer Intentions and Actions survey released Wednesday and conducted by BIGresearch, as of the second week in December, the average person has completed 46.5% of their shopping, less than the 49.5% the average person had completed by the same time last year.
In fact, nearly 37 million people (16.5%) had not even started their shopping as of late last week, while 7.6% say they have completely finished shopping already. The survey also found the average 25- to 34 year-old has finished about 50.2% of their shopping–the most of any age group.
Moreover, the survey found that shoppers are increasing purchases of discretionary gifts, with apparel, electronics, toy and jewelry ranking among the top gifts so far.
Spending on Discretionary Gifts to Increase?
“This holiday season, shoppers have their eye on more discretionary purchases–whether they’re looking for gifts or just a few small items for themselves,” said BIGresearch Consumer Insights Director Pam Goodfellow. “With less than two weeks until Christmas Day, many shoppers realize that it is crunch time for making decisions but are still planning to stick to their budgets and seek out good deals until the final gifts are wrapped.”
The NRF November total appear much more optimistic than than those released on Tuesday by the U.S. Department of Commerce, which reports total November sales edged up only 0.2%. The NRF figures, however, compare sales at retail store with last year’s figures excluding restaurants, gasoline stations, autos and online sales.
“Consumer spending this holiday season has surpassed expectations, though many shoppers continue to stick to their budgets and buy only what they need,” said NRF chief economist Jack Kleinhenz.
In related news today, FedEx reported that due to strong online shopping heading into holiday, its second quarter profit nearly doubled. FedEx’ total revenue rose 10% to $10.59 billion.