Five Reasons US Retailers May Have Jollier Holiday This Year.

Posted by truecreek on October 27, 2009 under More Dam News | Be the First to Comment

By Christina Cheddar Berk

Most of the early reads on how retail sales will shape up for the Christmas holiday period haven’t been all that jolly. At best, they have painted a picture of a shopping season that will be better than last year’s dismal turnout. But, according to some industry analysts, there are several reasons to believe that Santa might bring retailers a little joy this season.

1. Frugal Fatigue

Speaking on a conference call hosted by Dow Jones analyst Indexes and STOXX, Marshall Cohen, chief industry of market researcher NPD Group said consumers are getting tired of watching their pennies.

“Consumers are clearly telling us they are beginning to get tired of saving money,” Cohen said.

It has been more than a year since the economy started putting the pinch on consumer pocketbooks. Consumers have been trying to get their debt under control, and have pushed up the savings rate to decade-high levels. The holidays may finally give consumers a reason to start spending again.

2. Store Traffic Is Increasing

Have you noticed more folks at the store lately? ShopperTrack has, according to data analyzed by Richard Hastings, a consumer strategist for Global Hunter Securities. Hastings said he has seen signs of both year-over-year and month-to-month gains in the numbers of shoppers at the stores.

The increased store traffic is one signal that has prompted Hastings to boost his forecast for holiday sales. Although he previously expected sales to fall, he now anticipates retail sales for the November through January time period will rise 2.5 percent from last year.

3. Improved Guidance from Smaller Retailers

Another sign that things are starting to turn for retailers is the improved forecasts issued by even smaller retailers such as Bon-Ton Stores, Tuesday Morning and Pier 1 Imports.

Hastings said these comments are a sign that a new tide is coming in and “the smaller boats are being lifted up by a bigger wave.”

4. The New Normal

It just may be that consumers are finally comfortable with the new landscape. They have been spending carefully and planning for the holidays.

Retailers also have had time to plan, and with advancements in the way retailers track their inventory, are more capable to reacting quickly to chances in demand.

5. Weather

Weather may also play a role. Trends are aligning right now for better weather than last year, according to Paul Walsh, of Atmospheric and Environmental Research. For example, AER ,a Boston-based firm that analyzes the impact of climate change on business operations, expects, colder temperatures in December for the eastern part of the country, which could put consumers there in the holiday mood.

Weather has already played a key role in helping to boost retail sales in September by driving more sales of warm weather apparel before retailers marked down the cost of those items.

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