Retail sales will rise 4 percent this holiday season — nearly matching the 4.3 percent gain during November-December 2000 — as consumers slowly regain confidence in the economy, according to a preliminary forecast by the National Retail Federation (NRF).
What's more, consumer electronics may again rank high on Christmas wish lists, based on the trade association's criteria for what will likely be the most popular gift-giving categories.
"We anticipate that home-related merchandise and leisure goods will do well this holiday season," said NRF chief economist Rosalind Wells, who sees the economy growing around 3.5 percent in the second half of the year.
While acknowledging that consumers have been cautious in their spending, she believes they will continue to bolster retail performance thanks to very low interest rates and inflation, plus additional spending power from refinancing "cash outs."
NRF's sales projections encompass electronics and appliance stores, general merchandise stores, furniture and home furnishings stores, music/book/hobby/ sporting goods stores and apparel stores, and are based in part on its 2002 Holiday Consumer Intentions & Actions Survey, conducted by BIGresearch.
According to preliminary results, the majority of consumers, 62.6 percent, said they plan to spend the same amount on holiday shopping in 2002 as they did last year, when retail sales were up 5.6 percent.
BIGresearch president/CEO Gary Drenik cautioned retailers that they "need to be sure they are hitting the right notes with the customer," given a shopping environment that has turned even more "inward" since last year.
"This holiday, those notes increasingly focus on practicality, personal care, authenticity and essentials," Drenik said.