Strong economic indicators coupled with greater acceptance of alternate shopping channels could lead to a fourth-quarter bonanza for retailers, analysts report.
In their annual Retail Holiday Outlook survey, the National Retail Federation (NRF) and accounting firm Deloitte & Touche forecast a 6.5% increase in seasonal spending this quarter, the biggest spike since 1994.
Citing higher employment, income, consumer confidence, housing values and stock prices, the groups foresee sales of general merchandise, furnishings and apparel hitting the $185 billion mark, which exceeds the projections of consumers and retailers, who expect a 4.5% rise in holiday sales, the survey said.
American Express is even more optimistic. The company's Retail Index, which is based on a national opinion survey of more than 800 consumers, found that shoppers will budget 19% more of their income for gifts this year than last -- averaging $1,088 compared to $915 in 1998.
In addition to solid economic fundamentals, greater use of multiple shopping channels will also help fuel holiday sales, the studies show.
According to the NRF report, 42% of all consumers will use catalogs for their holiday shopping, making it the third most popular venue for buying gifts. This is up sharply from only two years ago, when 26% of shoppers made use of that channel.
Less pervasive, but on an even sharper growth curve, is the Internet. Some 10% of NRF respondents said they expect to use online services for holiday shopping this year, up from only 5% last year.
Similarly, 12% of consumers queried by Amex said they planned to purchase gifts online this season, while 26% said they would use the Internet in some shopping-related manner, including comparing prices and browsing for gift ideas. Among the Amex respondents who planned to shop online, 42% said it would be their first time buying holiday gifts on the Web.
"Shoppers appear to be budgeting their time as carefully as their money," said Valerie Soranno, VP/general manager of retail industries for American Express. "At least a third of consumers will do some shopping at home, either through catalogs or the Internet."