Holiday shopping lists may not be very long this year. According to a forecast released by Deloitte today, retailers will need to prepare for a flat holiday sales this year as consumers continue to save and try to cut costs where they can.
Deloitte's Retail group expects a zero percent change for the November through January holiday sales numbers compared to last year, with a total of $810 billion (retail sales during the same period in 2008-9 totaled $809 billion). This excludes motor vehicles and gasoline. While a flat holiday season is not great news for retailers, it would be an improvement over last year’s decrease in sales of 2.4 percent. According to Deloitte, the first such decline as can be seen on Commerce Department data dating back to 1967.
"Although there are signs that suggest the economy is nearing the end of its darkest days, many consumers remain burdened by restricted credit availability, high unemployment and foreclosures," said Carl Steidtmann, chief economist with Deloitte Research, in a statement. "Americans continue to save at historically high rates while also paying down debt, and these factors combined suggest another chilly holiday season for retailers."
However, Steidtmann believes the numbers may improve if other economic indicators, such as home prices and stocks prices, move up, with gas prices remaining stable.
These numbers are consistent with what retailers have been preparing for, adjusting inventory and reporting a cautious approach in their hiring for the holiday season.
Despite the lukewarm sales forecast many opportunities remain for targeting digital shoppers through a variety of mediums, per the study. “Retailers that can harness the power of technology likely have a better chance of engaging those consumers who are willing to spend,” said Stacy Janiak, vice chairman and U.S. Retail leader, Deloitte LLP, in a statement. “The proliferation of mobile applications and social networks may yield new opportunities to pursue targeted advertising, build brand loyalty and measure campaign effectiveness."
—Nielsen Business Media