Holiday Sales

Holiday sales to rise 3.6 percent this winter: NRF

Posted on by katiecmorgan

A more confident group of consumers are expected to loosen their purse strings this holiday, and are seen sparking an acceleration in retail sales growth over last year.

The National Retail Federation on Tuesday said it expects retail sales excluding automobiles, gasoline and restaurants to rise 3.6 percent in November and December, to $655.8 billion. That would mark an acceleration over last year’s 3 percent increase, and would easily top the 10-year average of 2.5 percent growth.

The trade organization’s forecast, considered the industry benchmark, is based on an economic model that factors in consumer credit, monthly retail sales and personal income.

NRF anticipates non-store sales, which skew toward digital, will increase between 7 percent and 10 percent, to as much as $117 billion.

“We have a lot more people working this year,” Jack Kleinhenz, NRF’s chief economist, told reporters.

When factoring in other indicators like wage growth and higher home prices, “our general sense of the economy is that we’re in better shape than we were last year,” Kleinhenz said.

Source: NRF

Retailers got off to a rocky start in 2016, as last winter’s unseasonably warm temperatures left their shelves stocked with coats and scarves. Stores were forced to aggressively discount these items to make way for spring goods, cutting into their margins. Retailers have finally gotten their inventory levels in check, boding well for their profitability this season.

Yet even as more Americans are working and receiving slightly higher paychecks, they’ve been reluctant to spend on traditional retail goods — namely apparel. Broad-based discounting has also cut into retailers’ top lines, requiring them to sell more items to record a gain.

And weather once again took a toll on sales in August and September, thanks to a warm back-to-school and early fall selling season. High temperatures dented apparel specialty stores’ revenue by $393 million during those two months as compared with the prior year, according to new research by Planalytics.

More broadly speaking, data from the Commerce Department shows that retail sales in August slipped on a monthly basis for the first time since March.

Despite the slowdown, Planalytics predicts temperatures on the densely populated East Coast will be more in line with typical years this holiday, which should help spur demand for cold-weather categories. And while some holiday purchases may be pushed back because of the election, the trade organization said it does not anticipate political uncertainty to dent sales.

“This year has not been perfect,” NRF President Matthew Shay conceded. “Overall we think this is a realistic number and very reflective of the current environment.”

Like NRF, separate forecasts from Deloitte, AlixPartners, the International Council of Shopping Centers and RetailNext are all calling for growth between 3.2 percent and 4 percent. PwC expects a more robust 10 percent lift in spending; unlike the other predictions, its forecast includes spending on restaurants and travel.

Retail sales excluding automobiles and parts rose 2.8 percent through August, according to the Commerce Department.

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CNBC

Forecast: Holiday Sales to Increase 3.6 Percent

Posted on by katiecmorgan

The first forecasts for the upcoming 2016 holiday season have been released, and they predict that retailers will enjoy solid sales during the crucial season which can comprise more than 20 percent of a retailer’s annual business, according to the National Retail Federation, the Washington D.C. retail trade organization.

Retail sales during November and December, excluding auto, gas and restaurant sales, will increase 3.6 percent to $655.8 billion, according to the NRF, which released its forecast on Oct. 4. Deloitte, the auditing, consulting and risk management company, forecast that holiday retail sales will increase 3.6 percent to 4 percent, according to a statement released Sept. 21. Retail sales should exceed $1 trillion during the season, said Daniel Bachman, Deloitte’s senior U.S. economist.

“Consumers have ramped up their spending this year on the back of a strong labor market. We also expect slightly higher growth in disposable personal income during the upcoming holiday season compared with last year,” he said.

During a conference call, Jack Kleinhenz, the NRF’s chief economist, also noted that economic indicators support predictions that sales will increase during the holiday despite gloom about the economy. “Certainly there will be some speed bumps that come along,” he said.

But with unemployment low—it is 4.9 percent, according to the Bureau of Labor Statistics—and consumer confidence increasing—it is at the highest level since the recession, according to a Sept. 27 statement from The Conference Board—things look good for the U.S. consumer.

“They have more money in their pockets, but they haven’t over-leveraged themselves,” Kleinhenz said.

Kleinhenz also is confident that the economy is in a much stronger position than it was last year when the NRF missed its holiday forecast.

“It would be a different picture if we had higher unemployment. We’ve been adding jobs, we aren’t at a break-out speed, but I don’t see where people are going to fall off of the side of the world and stop spending,” he said.

Last year, the NRF predicted that holiday retail sales would increase 3.7 percent. By the time the season’s last receipts were counted, the NRF announced that 2015 holiday sales had only increased 3 percent. Matthew Shay, the NRF’s president and chief executive officer, blamed the missed forecast on warm weather during the holiday season, inventory issues and retailers offering deep discounts early in the season.

The NRF also forecast sales increases for e-commerce and catalogs during the 2016 holiday season. It is forecast to increase between 7 percent and 10 percent to as much as $117 billion. Deloitte also predicted a robust forecast for holiday e-commerce sales, saying online sales will increase 17 percent to 19 percent, reaching $96 to $98 billion during the 2016 holiday season.

By Andrew Asch | Tuesday, October 4, 2016

Economists Say Retail Sales for 2016 Will Grow Slowly

Posted on by katiecmorgan

Retail sales in 2016 are expected to mirror 2015, and continue the current pattern of slow, steady but not very exciting growth, according to economists and industry experts who spoke at the National Retail Federation convention Tuesday.

The nation’s merchants likely will see “sluggish growth for a long time, unless there is something on a global level that shocks the economy,” said Paula Campbell Roberts, executive director, research, at Morgan Stanley, who participated in a panel discussion for press at the annual retail gathering at the Javits Convention Center in New York City.

Close to 34,000 retail professionals are attending the four-day gathering this year, looking for ways the boost store sales, which disappointed during the recent holiday season. More than 500 vendors are at the convention pitching high-tech solutions including ways to send messages to shoppers over their cell-phones, or payment methods that let consumers skip the checkout line.

In 2015, total retail sales rose 2.1 percent over 2014, according to U.S. Department of Commerce figures released last week. The retail panelists said Tuesday that they expect to see similar growth this year.

The NRF reported on Friday that holiday sales – excluding automobiles, gasoline and restaurant meals – rose 3 percent in 2015, missing the federation’s forecast of 3.7 percent sales growth in November and December.

Jack Kleinhenz, chief economist for the NRF, said Tuesday that missing the forecast made 2015 “from some perspectives a disappointing year.” However, he said, people should realize that 3 percent growth “ain’t all that bad.”

Individual retailers have been reporting mixed holiday results, with some, including The Children’s Place in Secaucus and Wayne-based Toys “R” Us, saying their holiday sales strongly outpaced the previous year’s, while other retailers reported declines.

Softness in retail sales extended to the luxury sector, which had been insulated from the overall retail downturn.

Luxury jeweler Tiffany reported Tuesday that its global holiday sales declined 9 percent and U,S holiday sales fell 10 percent, reflecting problems in the Chinese economy and a drop in foreign tourism in this country.

Kleinhenz Tuesday said retailers missed forecasts in part because early discounting in October pulled sales away from November, and that lower prices resulted in lower sales totals. Retailers, Kleinhenz said, are being hurt by a shift in spending away from clothes and other goods and toward experiences such as travel or health and wellness treatments.

Consumers, Kleinhenz said, “are spending more on themselves than on goods.”

Shawn Dubravec, chief economist at the Consumer Technology Association, said there was a “clear loss of momentum” in consumer spending at the end of 2015, but it is hard to tell if it was caused by a larger trend or a response to temporary issues.”

The problem with forecasting sales, he said, is “it’s always something – this time last year we were talking about abnormal amounts of snowfall” hurting holiday sales. This year, unusually warm weather is being blamed for weak sales.

Dubravec is relatively optimistic about 2016. Last year, he said, “was defined by unevenness” and “we expect less unevenness in 2016.”

However, the panelists noted that uncertainty or unexpected events, such as terrorism or other global problems, or even upheaval caused by the presidential election, will hurt retailers, because consumers tend to curb their spending when they are unsure about what’s ahead.

BY JOAN VERDON

January 18, 2016

Email: verdon@northjersey.com

Consumers Win as Retailers Cut Holiday Prices

Posted on by katiecmorgan

Retail sales for November — excluding automobiles, gasoline and restaurants — were up 0.5 percent over October and 3 percent from a year ago. That’s a welcome increase, but less impressive than what we had expected. While we have been comfortable with our estimate of the direction of sales, the November numbers mean we are going to be watching the next two weeks — including this weekend’s Super Saturday — very closely.

So what’s happening?

A closer look at the numbers reveals that while fewer dollars are coming in than expected, that doesn’t mean consumers are shopping less. In fact, unit volume appears to be up. The issue is that prices are down. And that means the same number of sweaters, toys or electronic gadgets sold brings retailers less revenue.

The Bureau of Economic Analysis’ price index shows that general retail prices were 2.9 percent lower in October than a year earlier. A number of factors are behind the lower prices — inventories are stable but elevated, in part due to the flood of merchandise that came into the country earlier this year after the labor dispute that brought West Coast ports to a crawl ended. Warm weather has reduced demand for seasonal items like coats and sweaters. Much of the extra money freed up by lower gasoline prices has gone to services such as travel and restaurants rather than retail merchandise. In addition, most consumers have seen little in the way of wage increases. Rent, health care costs and even the amount spent on communications like smartphones, tablets and broadband Internet service are all up.

More than anything, perhaps, is that consumers have become conditioned to expect discounts and promotions. As the TV commercial says “nobody pays retail anymore.”

All of this has combined to create a very deflationary atmosphere the past year or more, meaning retailers have needed to be competitive and drop prices to keep products moving off the shelves.

While prices may be down, demand is certainly up. November sales were generally solid, with strength seen in sales of electronics, food and beverage, clothing, sporting goods, general merchandise and on-line and other non-store sales. Weakness in furniture and building materials was seen, but both had been strong in October.

“Lower prices might be bad news for retailers. But they are good news for retailers’ customers, who are getting great values for the prices they pay.”
NRF Chief Economist Jack Kleinhenz

Economist Richard Curtin, who compiles consumer sentiment data for the University of Michigan, stated recently that overall buying attitudes were solid due to the lower prices. He noted that purchases of durable goods were at the highest level since 2006. He says consumers are willing to spend but, as has been the case since the end of the recession, they will continue to dig for discounts and sales.

What’s the bottom line? Lower prices might be bad news for retailers. But they are good news for retailers’ customers, who are getting great values for the prices they pay. And, in the long term, what’s good for consumers is good for retail.

Jack Kleinhenz

December 15, 2015

National Retail Federation