NRF: Holiday Sales Will Be Up 2.8%

Although it won’t be as big an increase as last year, the National Retail Federation predicts holiday sales this year will rise 2.8%, to $465.6 billion.

Holiday sales last year (defined as retail industry sales occurring in November and December) rose a whopping 5.2%. Still, this year’s expected increase remains above the 10-year average holiday sales gain of 2.6%, according to the NRF.

There have been 14 consecutive months of retail sales growth and a substantial reduction in household debt, according to the NRF. But uncertainty lingers due to the highly volatile stock market, higher gas and food prices, fiscal policy and meager job growth – all factors that could impact holiday spending.

Neil Stern, retail analyst and senior partner for retail consultancy McMillan Doolittle, says his company expects a holiday sales increase in the 2%-3% range.

But there are two factors to consider, he says. “Comparisons against a surprisingly strong 2010, which significantly exceeded most forecasts. And economic headwinds like unemployment, political uncertainty, and the stock market. We would suspect that most retailers would happily take an average year.”

Consultant Ken Lane of Hathaway & Lane and J. Schmid & Associates says the year-over-year comparison is lower than last year, “which seems to be plausible.”

With Christmas falling on a Sunday this year, coupled with the continued proliferation of offers from every channel, Lane thinks this will make it the “latest” Christmas ever. “If these numbers hold, it will start soft, then catch up to forecast.”

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