NRF: Holiday Retail Sales Will Grow 4.5% to $219.9B
The increase would be lower than the 5.1 percent year-on-year growth posted in holiday 2003, but vastly better than the 1.2 percent rise in holiday 2002. NRF predicts it will be hard to match last year's holiday sales growth, which was the largest increase since 1999.
"Despite economic and geopolitical concerns, consumers continue to set money aside for what is most important to them," NRF president/CEO Tracy Mullin said in a statement from Washington.
Home-related merchandise and consumer electronics are expected to do well. Trendy fashions should boost sales.
But the economy's shadow will loom large over the holidays, which typically account for nearly one-fourth of annual retail sales. Higher energy costs, rising interest rates, slow income growth and geopolitical threats are expected to be factors.
NRF classifies holiday sales as those occurring in November and December. Holidays in this period include Thanksgiving, Christmas, Hanukkah, Kwanzaa and, this year, Ramzan Idd. Holiday sales last year were $210.4 billion. The last holiday season accounted for 22.83 percent of total annual sales.
NRF did not break down online versus offline projections for the coming season.
"Many retailers see bricks-and-mortar stores and Web sites as working together during the holiday season to maximize potential sales," said Ellen Tolley, director of media relations at the NRF. "The bottom line: Many retailers don't care which channel their sales come from as long as various components work together to bring the most sales possible."
Online shoppers spent $18.5 billion in the 2003 holiday season, up 35 percent from $13.7 billion in 2002, according to an estimate from the eSpending report from Nielsen//NetRatings, Harris Interactive and Goldman, Sachs & Co.
The holiday 2003 e-commerce numbers, which excluded travel, showed that apparel, toys and video games software and hardware, consumer electronics, computer hardware and peripherals and video/DVDs generated the most sales.
Regardless of the growth, online and offline retailers will add staff to cope with holiday business, as is the usual practice. Retailers last holiday season increased staffing 3.9 percent, hiring an additional 800,000 workers.
But retailers will have to worry about shrinkage. The industry last year lost $10.77 billion from shoplifting and another $15.81 billion from employee theft.
"Retailers are doing a good job at protecting their losses, and many of them are utilizing new technologies to fight theft," Tolley said.