NEW CAANAN, Conn. – Retail sales over the holiday season will grow at less than half of last year’s rate as consumers struggle amid slow disposable income growth, stubborn unemployment woes — and beginning post election, “fiscal cliff” fears, a consulting firm here said.
Customer Growth Partners’ 11th annual Holiday Forecast calls for a “mediocre” year-over-year increase of 2.8% in retail sales, down from last year’s rate of 5.8% growth. CGP’s forecast is below consensus estimates calling for 3.5% to 4% growth, as exemplified by the National Retail Federation’s 4.1% growth forecast. The firm forecast $556.8 billion in U.S. retail sales during the November-December selling period, excluding autos, gasoline and restaurants.
“After two years of 5%-plus holiday growth coming out of the recession, it’s as clear as the nose on your face that consumers are tightening their purse strings, sharply cutting spending growth,” Craig Johnson, president of CGP, said in a statement. “Consumers aren’t panicked about the economy, but they are worried, so they’re buying less, they’re shifting from discretionary goods to needs, and they’re buying closer to need.”
Retailers who offer exceptional value will fare well, according to CGP. The firm said apparel and accessories would be the strongest sales category, led by footwear and performance wear.
CGP said e-commerce will rise by 11%, a sharp deceleration from 17% growth in the last holiday season.
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