Holiday CE/Majap Sales Will Rise, But Traffic Won't

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Chicago - CE and major appliance sales will increase 1.2. percent year over year in this holiday season, but foot traffic in stores will drop 4.9 percent compared with last year.

That is the prediction of ShopperTrak, a provider of retail foot traffic counting, managed services and business analytics.

The category's moderate outlook can be attributed to the limited number of blockbuster electronic products being introduced this season, the company said. Value-conscious consumers are also increasingly using the Internet to stretch their dollars by shopping at online outlets with potential for deep discounts or researching premium priced, large purchases.

As a result, when consumers do walk into stores, they have a purchasing strategy and are less likely to browse. This will account for significant foot traffic losses this holiday season, ShopperTrak said.

The company predicts that overall nation retail sales will rise 3 percent during November and December, despite the struggling economy, but foot traffic in stores will decrease 2.2 percent.

Holiday sales and traffic historically account for approximately 20 percent of annual retail activity. With U.S. Gross Domestic Product growth disappointing in the first half of 2011, the forecast indicating holiday retail sales and traffic is a key marker of the nation's economic health.

ShopperTrak's holiday sales increase prediction follows 19 consecutive months of year-over-year U.S. retail sales growth. The expected increase is moderate compared with the 2010 holiday season's 4.1 percent sales increase over 2009.

Conversely to sales, ShopperTrak expects foot traffic to continue decreasing through the end of 2011, due to high unemployment rates and gas prices seeing a 33 percent increase this season over last. So far this year, shoppers have visited an average of 3.10 stores per shopping trip, down from 3.19 per shopping trip in 2010 and far less than the four to five stores visited in early 2008 -- prior to the recession. Converting fewer numbers of shoppers to buyers has never been more important for retailers who understand this critical retail health indicator, the company said.

"The persistently high unemployment and fuel rates along with consumers' conservative purchasing attitudes will affect spending this holiday season more than in recent years," said ShopperTrak co-founder Bill Martin. "Every shopper in a store will be more valuable than last year, and retail stores should be ready to convert their holiday shoppers into sales."

Martin noted, "As the economy continues to struggle, tracking daily foot traffic and understanding store traffic patterns is more important than ever. Retailers who pay close attention to their browser to buyer conversion rates and adjust their product offerings, store layouts and staff scheduling to improve those rates will be the most successful this year."

ShopperTrak measures foot traffic in more than 25,000 stores in the United States and analyzes the data in a proprietary econometric model to create its National Retail Sales Estimate of general merchandise, apparel and accessories, furniture and other sales.  Its estimate precedes the federal government's official reports by several weeks, and since January 2005 it has been accurate to plus or minus 3 percent. Forecasted numbers may improve with any changes in the nation's unemployment rate, consumer sentiment or reduced gasoline prices.


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