NRF expects sales in the months of November and December to increase 3.9%, to $602.1 billion, over 2012’s actual 3.5% holiday season sales growth. The forecast is slightly higher than the 10-year average holiday sales growth of 3.3%. The sales forecast could change depending on how the situation with Congress and the Obama Administration fares as the holidays approach.
“Our forecast is a realistic look at where we are right now in this economy— balancing continued uncertainty in Washington and an economy that has been teetering on incremental growth for years,” said Matthew Shay, NRF president and CEO. “Overall, retailers are optimistic for the 2013 holiday season, hoping political debates over government spending and the debt ceiling do not erase any economic progress we’ve already made.”
On the recent government shutdown and NRF’s holiday outlook, “Our forecast is also somewhat hinging on Congress and the Administration’s actions over the next 45 days; without action, we face the potential of losing the faith Americans have in their leaders, and the pursuant decrease in consumer confidence.”
According to NRF, positive growth in the U.S. housing marketing and the increased consumer appetite to buy larger-ticket items give retailers reason to be cautiously optimistic for solid holiday season gains. However, much remains uncertain, including fiscal concerns around the debt ceiling and government funding, income growth and even policies and actions surrounding foreign affairs, all of which could impact holiday sales. According to NRF, the holiday season can account for anywhere from 20% to 40% of a retailer’s annual sales, and accounts for approximately 20% of total industry annual sales.
“The economy continues to expand, albeit at an unspectacular pace,” said Jack Kleinhenz, NRF chief economist. “In order for consumers to turn out this holiday season, we need to see steady improvements in income and job growth, as well as an agreement from Washington that puts the economic recovery first. Our forecast leaves room for improvement, while at the same time provides a very realistic look at the state of the American consumer and their confidence in our economy.”