Washington—While President Obama and Republican challenger Mitt Romney duke it during their debate tonight over which one can best handle the slow U.S. economic recovery, the National Retail Federation (NRF) today released some positive news for retailers.
In its annual forecast for holiday sales, the NRF predicts 4.1% increase to $586.1 billion*–that’s higher than the 10-year average holiday sales increase of 3.5%. (Actual holiday sales in 2011 grew 5.6%.**)
“This is the most optimistic forecast NRF has released since the recession. In spite of the uncertainties that exist in our economy and among consumers, we believe we’ll see solid holiday sales growth this year,” said Matthew Shay, NRF president/ceo. “Variables including an upcoming presidential election, confusion surrounding the ‘fiscal cliff’ and concern relating to future economic growth could all combine to affect consumers’ spending plans, but overall we are optimistic that retailers promotions will hit the right chord with holiday shoppers.”
While recent government data gives mixed messages on economic indicators that could influence holiday sales, such as the continued 8% unemployment rate, positive indicators are emerging that show a “cautious but capable consumer,” buoyed by increasing consumer confidence and rising home prices.
“While moderate compared to what we experienced the last two holiday seasons, the forecast is a very pragmatic look at what to expect this year given the current rate of economic growth,” said NRF chief economist Jack Kleinhenz, Ph.D. “There’s still some general anxiety amongst consumers when it comes to how the state of the economy is impacting their spending plans, but retailers can expect to see excitement around their promotions and plenty of bargain hunters both online and in stores in the coming months.”
NRF’s holiday sales forecast is based upon an economic model using several indicators including consumer confidence, consumer credit, disposable personal income, and previous monthly retail sales releases. The forecast now incorporates “non-store” category (direct-to-consumer, kiosks and online sales.)
Shop.org: Online Holiday Sales to Grow 12%
For the first time in its history, Shop.org today released its 2012 online holiday sales forecast, expecting sales to grow 12% over last holiday season to as much as $96 billion.*** The U.S. Department of Commerce estimates total 2011 4th Quarter e-commerce sales increased 15%. Shop.org defines the holiday season as sales in the months of November and December.
“Online retail has been a bright spot for years and we don’t expect that trend to change anytime soon, especially with the growth in mobile,” added Shay. “In addition to enhancing the site experience, retailers have spent the year investing in optimizing their mobile and social platforms, just what holiday shoppers are looking for.”
Seasonal Employment to Grow Between 585,000 and 625,000
According to NRF, retailers are expected to hire between 585,000 and 625,000 seasonal workers this holiday season, which is comparable to the 607,500 seasonal employees they hired last year.
“The retail industry creates hundreds of thousands of jobs every holiday season by adding new staff in stores, distribution centers, and customer service departments across the country. In addition to the newly created jobs, many retailers also offer existing staff the opportunity to work longer hours if they want,” said Shay.
About the National Retail Federation
As the world’s largest retail trade association and the voice of retail worldwide, NRF’s global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents an industry that includes more than 3.6 million establishments and which directly and indirectly accounts for 42 million jobs–one in four U.S. jobs. The total U.S. GDP impact of retail is $2.5 trillion annually, and retail is a daily barometer of the health of the nation’s economy. www.nrf.com.
* NRF defines “holiday sales” as retail industry sales in the months of November and December. Retail industry sales include most traditional retail categories including non-store, auto parts and accessories stores, discounters, department stores, grocery stores, and specialty stores, and exclude sales at automotive dealers, gas stations, and restaurants.
** Holiday retail sales for the past several years have been updated based on revisions from the U.S. Department of Commerce, and NRF most recently revised how it calculates retail sales to now include non-store and auto parts and auto accessories stores.
*** Shop.org’s estimates are based on data collected by the U.S. Department of Commerce, the Federal Reserve, U.S. Census, The Conference Board, and NRF calculations. These include personal income and spending, consumer credit, consumer confidence, and previous monthly retail reports.