WASHINGTON — The National Retail Federation (NRF) has released its 2009 holiday forecast, projecting holiday retail industry sales to decline 1 percent this year to $437.6 billion.
While this number falls significantly below the 10-year average of 3.39 percent holiday season growth, the decline is not expected to be as dramatic as last year’s 3.4 percent drop in holiday retail sales nor as severe as the 3 percent decline in annual retail industry sales expected for all of 2009.
Though some hopeful signs of a recovery have begun to emerge, like better-than-expected sales in August and momentum in the stock market, continued consumer uncertainty over job security and housing values will take a toll on spending this holiday season. And, as retailers become even more promotional, certain popular holiday categories such as apparel and electronics may experience deflation due to aggressive sales.
“The expectation of another challenging holiday season does not come as news to retailers, who have been experiencing a pullback in consumer spending for over a year,” said NRF president and CEO Tracy Mullin. “To compensate, retailers’ focus on the holiday season has been razor-sharp with companies cutting back as much as possible on operating costs in order to pass along aggressive savings and promotions to customers.”