Although many of my friends and family say they will spend less this upcoming holiday season, overall there appears to be good news on the horizon for retailers. The last few years have been downright painful with sales declines and moderate gains at best. With sales rising for 13 months in a row as of September 2010, retailers across the U.S. have reason to be optimistic about upcoming holiday consumer spending.
After a sharp sales decline of 3.9% in 2008 and a moderate increase of 0.4% in 2009, holiday retails sales in 2010 are expected to increase 2.3% to $447.1 billion according to the National Retail Federation. That growth remains slightly lower than the ten-year average holiday sales increase of 2.5% but would be the best increase for retailers in three years.
Reuter’s news organization reports that U.S. e-commerce spending could be 7-9% higher than during the 2009 holiday season based on digital marketing intelligence from comScore. Additionally, an American Express Publishing and Harrison Group poll found that affluent Americans are set to spend 4 percent more on gifts this holiday season. The increase in holiday gift spending among this group comes from a rise in the number of affluent U.S. families, not an increase in household holiday budgets, which are due to remain flat at about $2,100.
One dim spot in all of the good news is that surveys have shown that households with a discretionary income of more than $100,000 found nearly 40 percent saying retail service has worsened and 20 percent saying product and service quality has deteriorated.
Although early optimism is higher than in recent years, the U.S. is still in the midst of fallout in the housing market and high unemployment rates. Some surveys show consumers continuing to moderate their spending and opening their wallets primarily for necessities and few luxuries or non-essential purchases. If these survey results are accurate, in the midst of high levels of early optimism, there is a chance that another lackluster holiday spending season could be on the horizon for retailers in 2010.