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

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

That is the prediction of Shopper- Trak, a provider of retail foot-traffic counting, and business analytic services.

The categories’ moderate outlooks 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 are researching large, premium-priced purchases.

As a result, when consumers do walk into stores, they already 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 despite the struggling economy, overall national retail sales will rise 3 percent during November and December, although foot traffic in stores will decrease 2.2 percent.

Holiday sales and traffic historically account for approximately 20 percent of annual retail activity, although the figure is nearly twice that within CE. With U.S. Gross Domestic Product growth disappointing in the first half of 2011, the forecast for holiday retail sales and traffic is a key marker of the nation’s economic health.

ShopperTrak’s holiday sales 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, ShopperTrak expects foot traffic to continue decreasing through the end of 2011 due to high unemployment rates and gas prices that are 33 percent over last year’s levels. So far this year, shoppers have visited an average of 3.1 stores per shopping trip, down from 3.2 per shopping trip in 2010 and far less than the four to five stores visited prior to the recession in early 2008. 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.”


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