Despite political and fiscal uncertainties, the National Retail Federation predicts holiday sales this year will rise 4.1%, to $586.1 billion.
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Holiday sales last year (defined as retail industry sales occurring in November and December) rose 5.6% after NRF’s prediction of 2.8%. Still, this year’s expected increase remains above the 10-year average holiday sales gain of 3.5%, according to the NRF.
NRF President and CEO Matthew Shay said today this is the “most optimistic forecast we’ve released since the recession. We consider this solid growth, a solid projection, and a step in the right direction. We think Santa’s helpers are going to be on the hook for overtime this holiday season.”
Following a rollercoaster ride for the retail industry this year, Shay said NRF was encouraged by solid back-to-school results.
“We view this as good news considering the variables and uncertainties that still exist in our economy,” Shay said.
The presidential election looms as the largest variable, Shay said, the results of which could play a huge role in future economic growth.
NRF Chief Economist Jack Kleinhenz said during a conference call that the economy is in a “high anxiety state, but consumers have been critical to its driving force. The consumers are there. We’re talking about good news. This is not a sub-par holiday retail forecast.”
Another factor which bodes well for the holiday season is the weather, Kleinhenz said. Generally speaking, The National Weather Service is calling for above-average temperatures for October, November, and December, which “could be good news for us.”
NRF’s holiday sales forecast is based on an economic model using several indicators including consumer confidence, consumer credit, disposable personal income, and previous monthly retail sales releases. It also includes the non-store category (direct-to-consumer, kiosks and online sales.)
Shop.org today released its 2012 online holiday sales forecast, expecting sales to grow 12% over last holiday season to as much as $96 billion. “This is the evolution of the industry,” Shay said, “with the introduction of new devices, and the proliferation of devices that didn’t exist a year ago getting into the hands of consumers.”
Consumers are channel agnostics, for the most part, Shay added. “They just want a similar experience across all platforms.”