Projections/ Intelligence for the 2011 Holiday Shopping Season (Sales, Jobs).
Holiday sales are a key component of fourth quarter performance. Here are some early research projections for the 2011 Holiday Shopping Season. There are a lot of articles out there right now, but most of them are drawing from these primary sources. I will be adding to these as more projections come in.
FROM THE INTERNATIONAL COUNCIL OF SHOPPING CENTERS:
(September 21, 2011) The International Council of Shopping Centers (ICSC) forecasts that U.S. holiday sales in 2011 will post a moderate gain, though somewhat subdued relative to its prior year’s pace. Based on ICSC’s metric of industry performance, shopping-center sales are expected to increase by 2.2 percent during November and December 2011 and relative to those same months of the prior year. In 2010, the holiday season posted a 5.0 percent gain following two back-to-back declines, which were a result of the severe 2007-09 recession.
More broadly, three common measures of U.S. industry holiday sales—shopping-center sales, ICSC’s composite of major chains and “GAFO-store” sales—all are expected to increase in 2011 by a slower pace of between 0.3 and 2.8 percentage points, depending on the metric, compared with its 2010 holiday performance. tinyurl.com/3l6hly2
One of the problems here is that inflation is not taken into account. The next link takes inflation into account.
(September 23, 2011) Kantar Predicts Weak Holiday Sales. From: Global License!
Retail sales growth for the fourth quarter holiday period will be half of what it was last year, according to Kantar Retail.
The predictions are not a question of whether holiday sales will be weak, but rather how weak in the wake of declining consumer and business confidence.
Kantar Retail forecasts growth of 2.8 percent for this year's holiday season, compared with 5.6 percent last year, in the key holiday retail segments combined.
The holiday segments included are home improvement stores, catalogs, online sales and the key retail sectors such as conventional and discount department stores; supercenters and warehouse clubs; apparel stores; and specialty stores that carry items such as furniture, home furnishings and consumer electronics.
The holiday outlook is even weaker in unit volume or inflation-adjusted terms. Volume growth is forecast to be flat for the holiday with significant risk of turning negative by year-end or the start of 2012.
"If unit volume or inflation-adjusted growth turns negative for retail sales, it would likely coincide with a recession in the overall economy," says Frank Badillo, senior economist for Kantar Retail. "While the outlook isn’t negative for all retail sectors, it will be driven by the degree to which declining confidence affects spending decisions, particularly for businesses."
As households curb spending in discretionary categories, the home goods and soft goods retail channels will be the focus of the holiday growth slowdown with flat nominal growth for these channels, while inflation-adjusted growth is predicted to be negative in several channels including apparel, home improvement and furniture/home furnishings stores. tinyurl.com/3zkpx9s
Here are some of the highlights of a new nationwide survey conducted August 22-24 by SteelHouse. In conjunction with Chicago market researcher Synovate eNation. The SteelHouse/Synovate survey has a margin of error of +/- 3 percentage points.
(September 21, 2011) Eighty Two Percent of Americans Are Changing Their Shopping Behavior This Holiday Season. From SteelHouse Consulting.
SteelHouse asked 1,000 Americans: “Given the current state of the economy, how will your shopping and buying behaviors change this holiday season?” They were asked to select all that apply.
• 62% I will spend less money overall.
• 50% I will comparison-shop much more to find the best prices.
• 31% I will no longer buy anything without a discount or free shipping.
• 28% I will spend more time browsing online than going to the mall.
• 22% I will redeem loyalty points to buy gifts instead of using cash or credit.
• 11% I used to buy name brand/high-end items, but will not do so this year.
• 11% I will use coupons for the first time.
• 9% I will consider buying used or refurbished items for the first time.
• 18% My shopping behaviors will not change.
“It’s clear that shoppers this holiday season aren’t going to buy unless presented with a compelling offer,” said Mark Douglas, SteelHouse CEO. “The challenge for retailers is figuring out the right deal for every shopper since the same offer isn’t going to work for everyone. The winners this holiday season will be those retailers who tailor their offers to shoppers while they’re still shopping, before they move on and see a competitor offer.”
Families will be looking for deals. In every category, respondents with children in the house are making more changes to shopping behavior than those without.
• More than half (56 %) will comparison-shop more than they used to.
• More than a third (34 %) will not buy without discounts / free shipping.
• More than a third (36 %) will spend more time browsing products online.
• Nearly a third (31 %) will redeem loyalty points to buy gifts.
• One in five will use social media to find or share deals.
Jobs supply the oxygen for consumer spending. If employment drops, expect retail sales to drop. Here is the latest info on job projections.
(September 2, 2011) Job growth will continue in 2011, but at levels too low to reduce the unemployment rate, provide a kick to GDP and sustain a strong recovery. From: Kiplinger.
Private sector jobs will keep growing at an average of 100,000 a month in 2011—not enough to lower the jobless rate, which seems stuck at 9.1%.
Although firms aren’t hiring in large numbers, they’re not laying off much either, with many preferring to cut hours rather than workers, if necessary. As a result, the number of people working part-time but wanting a full-time spot rose from 8.4 million to 8.8 million.
Even so, more hiring is required to supply the economy with the oxygen needed to grow. The slow pace of private job gains dampens growth in incomes. That, in turn, results in less consumer spending, which accounts for 70% of all economic activity.
Consumer spending grew at a 0.7% rate in the second quarter, when projected out over a full year, revised up from 0.4%. The result was an increase in GDP of just 1.3% annualized, less than the second estimate of 1% in August.
While consumers are spending, they’re weighed down by heavy debt. They are using about 5% of their income to pay down debt, sucking $600 billion out of consumer spending this year. Meanwhile, a 30% drop in housing values over the past few years adds to the reluctance to spend. Consumers aren’t likely to contribute much to growth this year or next.
So, the economy continues growing but is only one shock away from another recession.
So far, holiday shopping looks like the US GDP - Flat. Given the situation, flat is not bad. Based on the data so far, it appears sales will be slighty above last year. So any boost to the markets should be of a similar size to last year.
Here is the latest average Weekly U.S. Rail Carloads: All Commodities with September data.