Holiday spending to increase by 2.4 percent
New York--Those who believe it’s too early for holiday advertising might not like it, but one Chicago-based analytics firm has released its retail sales prediction for November and December.
ShopperTrak, which has devices in place that measure foot traffic and customer patterns at major shopping centers, issued a news release Tuesday stating that this November and December, consumers will spend 2.4 percent more than they did in November and December 2012.
Foot traffic, however, is expected to decline 1.4 percent as consumers continue their “surgical” approach to spending, researching extensively online and knowingly exactly what they want before heading out to the stores.
Company founder Bill Martin said this means retailers need to be sure they convert every shopper who comes through the door.
He said while recovery in the housing market and high levels of consumer confidence should help fuel holiday spending, other factors may play against it.
Factors likely to detract from holiday sales include geopolitical crises in the Middle East, high gas prices and unemployment. Although the overall unemployment rate is down, there are still a fairly high percentage of people who aren’t factored into that rate because they simply have stopped looking for work, he said.
Another negative for retailers is the 2013 calendar. Martin said there are only 25 days between Black Friday and Christmas this year, the fewest number possible, and one less weekend.
Given all of these factors, ShopperTrak predicts retail will continue to post gains that are not robust but, rather, reflective of an economy that is “chugging along,” Martin said.
“It (the economic recovery) has been a long, hard pull. Retail is experiencing the same thing,” he said.
While 2.4 percent is not an earth-shattering increase by any means, Martin notes that it would mark the fourth year in a row that holiday sales have climbed.
According to retail sales numbers from the federal government, November and December sales ticked up 4.1 percent in 2010, 3.7 percent in 2011 and 3 percent in 2012, for a total increase of 10.8 percent.
The cumulative gains of the past three years already are enough to erase the drop in holiday spending experienced in 2008 and 2009, when sales fell 5.8 percent, positioning 2013 holiday season spending to top pre-recession levels.
ShopperTrak’s assertion that the compounded growth of the last several years has put the U.S. economy back to where it was prior to the recession mirrors a recent report by Forbes’ magazine that the country’s wealthiest residents finally have gained back all they lost in the financial crisis that began five years ago.
“Many (wealthy) people have experienced that,” Martin said. “I don’t know if the middle class has.”