Retail CMOs Predict 4.2% Increase in Total Holiday Store Sales

In Industry News, Reports, What's New by Accessories Staff

-holiday-shopping-word-cloud-on-53759167Chicago—A skittish market and diminished back-to-school sales have U.S. retailers feeling cautiously optimistic for the upcoming holiday season.

According to the BDO USA survey, chief marketing officers (CMOs) at leading U.S. retailers forecast a 4.2% increase in overall holiday store sales, consistent with growth expectations in 2014. This year’s projection is also only slightly higher than the National Retail Federation’s expected 3.7% to $630.5 billion, slower than the 4.1% increase during last year’s November-December period.

Holiday Season Total Store Sales Forecasts

New Type of Consumer

Similar to 2014, the majority of retailers (61%) believe sales will increase this year, with only 7% expecting a sales decrease, down from 12% last year. This could be due to signs of broader economic improvement, including the housing market’s continued recovery and lower energy prices. However, despite experiencing cost-savings at the pump, consumers continue to be price sensitive and the level of sales expected from the windfall of cheaper energy has not yet materialized, even with retailers (28%) citing energy and fuel costs as a major influence this year. Reaffirming this is the less than stellar back-to-school sales, which resulted in an underwhelming August and September for retailers.

“The modest year-over-year increase could be attributed to increasingly parsimonious consumers, who are a product of the recession and not consuming as much as they once did,” said Ted Vaughan, national leader and partner in the Consumer Business Practice at BDO USA, LLP. “And because of this consumers are favoring a more strategic and cost-conscious approach, no matter the season. This new type of consumer is also not motivated by sales events and has become conditioned to hunt and wait for the best price, knowing retailers will turn to an intense discounting strategy to move product and spur sales.”

About the Survey

The BDO Retail Compass Survey of CMOs is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief marketing officers, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation’s retailers. These findings are from the tenth edition of the BDO Retail Compass Survey of CMOs, which examined the opinions of 100 CMOs at leading retailers located throughout the country. The telephone survey was conducted in September and October of 2015.