A quick trip to the local Kmart store confirmed what I had suspected: It was about this time last year that I was surprised by the sight of artificial Christmas trees side-by-side with Halloween costumes and candy.
And there they were again on Tuesday, the red-green and black-orange themes clashing head-on in the section of the store where back-to-school crayons and notebooks had stood quiet sentinel just a short time ago.
So last year wasn’t a fluke at all but a preview to an annual mash-up. Still, I had to wonder whether someone wasn’t pushing the envelope.
But come to find out, retail sales projections already have been posted for the 2011 holiday season: They won’t be as strong as in 2010 but much better than during the depths of the Great Recession.
Two industry trade groups, the National Retail Federation and the International Council of Shopping Centers, suggest that holiday sales this year will be relatively ho-hum — subdued when compared to last year but nevertheless a bit above average. The NRF predicts sales of $465.6 billion for the November-December period, up 2.8 percent from 2010. The ICSC sees sales of $449 billion at U.S. shopping centers, up 2.2 percent from last year.
In 2010, holiday sales rose 5 percent, the two groups reported, a far cry from the recession-influenced 4 percent drop in 2008 and 0.4 percent decline in 2009. The 10-year average for holiday sales is an increase of 2.6 percent, according to the NRF.
Michael Niemira, the ICSC’s chief economist, blames “strong economic headwinds” for this year’s moderate holiday sales forecast. While optimism grew in the first half of the year that the economic recovery was gaining steam, that momentum flagged over the summer in the face of higher gas and food prices, gyrations in the stock market, persistently high unemployment, political gridlock in Washington and unrest abroad.
One group, the Economic Cycle Research Institute, even sounded an alarm in late September that the country was headed into a new recession — not a double-dip on the Great Recession but a whole new period of contraction. And a report on consumer sentiment released last week showed Americans taking a bleak read of the economy six months out, Bloomberg reported.
“Just when you think the U.S. economy is turning around, another factor comes into play that changes the game,” says Jack Kleinhenz, the NRF’s chief economist. “How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel.” His group says strong promotions and lean inventory will serve retailers well this year.
Holiday sales can represent 20 percent to 40 percent of annual revenue for many retailers. Indeed, one definition of “Black Friday” — the day after Thanksgiving when shoppers turn out in droves — pegs it as the time of the year when the retail ledger goes from red to black as stores stop recording losses and head toward profitability.
Overall last year, retail sales topped $2.34 trillion, according to the NRF. And holiday sales, at $453 billion, contributed to 19.4 percent of the total.
That helps to explain the early appearance of Christmas decorations in stores: While most shoppers hit the aisles in November and early December, about 40 percent of consumers begin their holiday shopping before Halloween, reports the NRF — some even before September.
Can artificial tree displays in August be far behind?
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