The Nation Retail Federation expects holiday sales to rise 2.8% to $466 billion this year. That estimate has already been questioned as unemployment stays above 9% and discretionary income remains stagnant. Another indication that this holiday may be nearly disastrous is a new Gallup poll.
According to the research firm, “Americans forecast they will spend $712 on Christmas gifts this year, nearly identical to the $715 they estimated they would spend on Christmas at this time last year.” Holiday sales in 2008 were supposed to be the lowest in years, but Christmas expenditures were $801 that year and $740 in 2009, based on Gallup data.
The Wall Street Journal recently reported that many small retailers are concerned that troubled holiday revenue could push them out of business. A by-product of this would be a weak economy in the first quarter of 2012 as retailers cut staff and close stores because they did not do well in November and December. Job cuts cause higher unemployment, which further undermines national retail sales. This happened in 2008 and 2009. That pattern appears to be one that will be repeated this year as well.
Whatever stimulus packages or jobs programs may come out of Washington are already too late to bolster the economy until the first or perhaps second quarter of 2012. That assumes any bill to help the jobs market will be passed at all.
It is too late in the year to reverse the move into another period of dismal holiday sales. The work to remedy the problem needed to be done much earlier this year. The Nation Retail Federation’s forecasts are too optimistic. Many of its members are in for a hard time.
Methodology: Results for this Gallup poll are based on telephone interviews conducted Oct. 6 to 9, 2011, with a random sample of 1,005 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
Douglas A. McIntyre