Holiday Season Shopping Could Be a Bust This Year

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Retail sales during the 2013 holiday shopping season are forecast to rise by 2.4%, but store traffic is expected to decline by 1.4% from year-ago levels. Compared with last year’s sales gain of 3%, this year has got to be something of a disappointment for retailers. Sales also rose more in 2011 and 2010 — 4% and 3.8%, respectively.

The data was published Tuesday by research firm ShopperTrak and is the first estimate we’ve see on prospects for this year’s holiday season. Store sales during the period between Thanksgiving and Christmas typically account for about 20% of a retail store’s annual sales.

ShopperTrak estimates sales based on its surveys of shopper traffic to thousands of U.S. retail stores. The firm’s estimates do not include online sales, which last year represented about 7.3% of all holiday sales.

The calendar is also working against retailers this year with six fewer days between Black Friday and Christmas. An early start to Hanukkah will help drive a move to earlier promotions. ShopperTrak’s founder noted:

Nobody can afford to procrastinate. Retailers must have their holiday marketing and operations ready to go when November begins, as consumers will be ready to take advantage of those deals.

Another early gauge of holiday expectations is due soon as well. Some large retailers will likely announce their plans for hiring. Last year Kohl’s Corp. (NYSE: KSS) said in mid-September that it planned to hire 52,700 seasonal workers. A few days later Target Corp. (NYSE: TGT) announced that it would hire 80,000 to 90,000 seasonal employees and Wal-Mart Stores Inc. (NYSE: WMT) said it would hire about 50,000 workers. Online retail giant Inc. (NASDAQ: AMZN) announced in early October last year that it would hire 50,000 seasonal workers at its various fulfillment warehouses.

The decline in forecast store traffic should be particularly worrisome to retailers. Many will be forced to resort to earlier and perhaps deeper discounts in order to attract shoppers. The shortened shopping season doesn’t give them much time to chase higher margins.