COLUMBUS, Ohio — An ominous macroeconomic outlook including a threat of a second recession should result in holiday retail sales growing at less than half the rate they grew in 2010, an economist for Kantar Retail here said in a web event Tuesday.
Grocery stores and drug stores could see a percentage gain as compared to 2010, but virtually all of the growth will be due to price inflation, Frank Badillo, senior economist for Kantar, said. Overall retail sales are projected to grow by 2.8% this year, down from 5.6% growth last year, Kantar said. Grocery and drug retailers should see their sales grown by 3.9%, up from 3.1% growth a year ago that was not inflation-aided.
Badillo said recession risk was high for the holiday season, citing a series of events this year that derailed a stimulus-aided recovery including debate over the debt ceiling in the U.S., the earthquake in Japan, fuel price spikes and instability in European markets. Fast-rising inflation in Asia raises the possibility of a “hard landing” there, he added.
“What the macroeconomic outlook means for holiday sales is ‘how bad is it going to be,’” Badillo said. “We think year-to-year growth will be half of it was a year ago.”
Mary Brett Whitfield, Kantar’s senior vice president, said that Kantar’s consumer surveys indicated “shoppers are signaling a desire to make it a merry holiday season,” saying more shoppers planned to spend more, and fewer plan to spend less, than they did a year ago. But, she cautioned, actual sales are likely to lag consumer’s spending intentions, as they did during the back-to-school shopping season.