New York—Sure there’s unease about what a U.S. government shutdown might mean to the economy. But unemployment dropped to its lowest level since December 2008 last month and housing prices have grown 15% since last year.
Those factors as well as some pent up demand should result in better holiday sales this year. That’s what the International Council of Shopping Centers (ICSC) forecast today.
Prices, Margins to Remain Stable
Coming in between Deloitte’s forecast for at least a 4% hike in holiday sales and ShopperTrak which predicted a 2.4% increase, ICSC is looking for a 3.5% increase in November-December holiday season, even though retailers are expecting a more modest spending season. In 2012, November-December sales rose 3% (excluding cars, food and beverage sales), ICSC reported.
ICSC noted that there should be less discounting this season with lean inventories, “lessened drag from economy and policy issues.” Plus wealth effect improvements due to rising housing and stock markets as well as strong online spending gains.
Additionally, ICSC anticipates that the other two measures of U.S. industry holiday sales—shopping-center “inclined sales” are estimated to rise 3.4%. and chain store sales should increase 2%.
“We’re going to see a more subdued spending mood from consumers, but what counts is that we’re on track to have a better holiday sales season that last year,” said Michael P. Niemira, vice president of research and chief economist for ICSC. “With leaner inventories, retailers can expect their prices and margins to remain stable, which is another good indicator of stronger sales.”
Moreover, there will be an increase in holiday hiring that is “highly correlated” with holiday spending: a 0.5% increase in seasonal hires from last year.
Founded in 1957, ICSC is the premier global trade association of the shopping center industry. Its more than 60,000 members in more than countries include shopping center owners, developers, managers, marketing specialists, investors, retailers and brokers, as well as academics and public officials. As the global industry trade association, ICSC links with more than 25 national and regional shopping center councils throughout the world. www.icsc.org.