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Holiday Sales Up 3%: Forecasts

9/26/2011 09:24:48 AM Eastern
New York - A new pair of retail forecasts point to modest sales gains for the holidays.

Global consultancy Deloitte expects total U.S. holiday sales to grow 2.5 percent to 3 percent for the November through January period, to upward of $877 billion, compared with last year's 5.9 percent gain.

Similarly, the International Council of Shopping Centers (ICSC), a commercial real estate trade group, foresees 3 percent growth in general merchandise sales to $250 billion for November and December, compared with a 4.1 percent gain last year.

Both reports match last week's 3 percent forecast from ShopperTrak, which also projected a 1.2 percent increase in CE and appliance sales for November and December, but a 4.9 percent decrease in total foot traffic year over year.

Deloitte said that persistent weakness in the housing and employment sectors, plus higher prices for food and apparel, will temper several months of rising consumer spending. While retailers are positioned to weather the slow growth by operating at lean and efficient levels, merchants should also be prepared with contingency plans.  "Retailers need to be nimble enough to quickly adapt and adjust their inventory, assortment, pricing, and promotional strategies when consumer demand fluctuates," advised vice chairman Alison Paul.

Deloitte is also forecasting a 14 percent increase in direct-to-consumer sales. Of those, nearly 75 percent will be online purchases, with the balance comprised of catalog and interactive TV sales. 

"Double-digit growth in the non-store channel has given the industry a major boost, and retailers that put online channels to work for their physical storefronts have the advantage," said Paul, who also heads Deloitte's U.S. retail and distribution sector.  "The brick-and-mortar store is still central to the shopper experience. Retailers that integrate the power of the sensory experience in-store with relevant, timely information via their websites and mobile applications are well-positioned to lead the way this holiday season."

Paul added that retailers need to be sure their multichannel strategy is both flexible and focuses on a personalized experience this season, as many holiday shoppers will be researching online and on their smartphones both before and during their trips to the store. "Store associates can be a critical element to any digital strategy to complete and up-sell once the customer comes into the store," she said. "It's important that they are well-versed on the latest products, promotions, pricing and competitor offerings that consumers receive through online and mobile channels."
 
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