Holiday shopping forecast bleak
- October 31, 2013 - 11:19 PM
Count on coal this Christmas — so says Morgan Stanley in the first major forecast of a decidedly dour holiday season. Retailers hoping for a respite from a year of so-so shopping can instead expect the worst Thanksgiving-to-Christmas sales since 2008, the financial services firm said Thursday.
Five years ago, the industry was free-falling into recession. This year, new worrisome economic conditions loom as stores gear up for a period that can sometimes account for 40 percent of annual revenue.
Shopper confidence is low. The recent federal government stalemate and shutdown was a damper. The window for holiday shopping is six days shorter than it was last year.
At the same time, consumer spending, which makes up more than two-thirds of economic activity, is actually getting a boost. Gasoline prices are lower, and net worth is rising because of higher real estate values and a stock market upswing, Morgan Stanley said.
But instead of shoveling extra money into gifts, many Americans are plowing it into big-ticket items such as cars, appliances and home improvement goods.
The report anticipates that during the fourth quarter, retailers will see a scant 1.7 percent increase in sales at stores open at least a year. Such same-store sales are an important indicator because they eliminate the effect of opening and closing outlets during the previous 12 months.
The National Retail Federation said in early October that it expected holiday sales to rise 3.9 percent to $602.1 billion. The forecast — described as “neither robust nor pessimistic” — shows improvement from last year’s 3.5 percent boost.
Los Angeles Times
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