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ANALYSTS: MOST RETAILERS ARE IN FOR HAPPY HOLIDAYS

AdAge

By: Adrianne Pasquarelli

As the holiday shopping season gets underway—only 83 days till Christmas!—the sales predictions are starting to pour in and there’s not a Grinch in sight. Most reports are as cheerful as the season itself: The trade group the National Retail Federation forecasting a robust 3.6 percent to 4 percent increase in sales—exceeding the five-year average of a 3.5 percent rise—on Tuesday.

The NRF’s report follows earlier predictions last week by Deloitte, which expects super healthy growth of 4 percent to 4.5 percent over last year, and the International Council of Shopping Centers, which predicted a 3.8 percent rise in consumer spending.

“Across the board, the retail industry is very strong,” says Matthew Shay, president and chief executive of the NRF, noting that brands are making investments in both brick-and-mortar and online to meet consumer demand. “Our forecast reflects that steady momentum both of the economy and industry expectations.” He adds that this year, retailers get an additional day of sales with the 32 days between Thanksgiving on Nov. 23 and Christmas.

Yet recent reports tell a different story. Toys R Us filed for Chapter 11 bankruptcy protection last month. Top toy brands Mattel and Hasbro have posted recent sales declines. And Lego, which had seen a decade of double-digit sales increases, just announced it will lay off 1,400—or 8 percent of its workforce—amid sales and profit drops.

While toys are down, electronics like smart phones and videogames, along with appliances, are still hot items, says Jack Kleinhenz, chief economist at the NRF. Fashion, not so much.

“There hasn’t been any discernible trend in apparel,” he says, adding that most retailers need product exclusives to maintain a competitive advantage.”

Retail experts do expect the recent hurricanes and weather to have some impact on the way sales data is reported in the near future. Already, those populations affected by hurricanes saw nearly $4 billion in sales shift from categories such as apparel and sporting goods to need-based items, according to Planalytics, which provides weather analytics.

Consumers in Florida, for example, are focused on do-it-yourself items and household repair products. So far, after years of Christmas ads creeping into September, major holiday campaigns have yet to break.

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