The National Retail Foundation predicts holiday sales will be up 2.8% this year, to $456.6 billion, in what the industry group called just an “average” season.
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While that growth is much lower than the 5.2% growth retailers experienced last year, it is still slightly ahead of the 10-year average holiday sales increase of 2.6%. Las year, online shopping surged 12% to $32.6 billion.
Sales have been gradually rebounding after they fell by more than 4% in 2008 at the height of the financial collapse. Last year, sales hit their highest level since 2005.
“While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009,” said NRF chief executive Matthew Shay.
Some economic indicators have actually painted an optimistic picture for this year’s holiday season, including 14 consecutive months of sales growth in the retail sector and narrowed household debt. However, consumer uncertainty has reemerged since the start of the debt debacle in Washington this summer and the ongoing issues in Europe.
Adding to that is consistently high unemployment, a volatile stock market, and rising prices this year for gas and food.
“Just when you think the U.S. economy is turning around, another factor comes into play that changes the game,” said NRF’s chief economist Dr. Jack Kleinhenz.
“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,” he said.
A poll by Gallup showed that consumer retail spending, including money spent in restaurants, at gas stations and in shops, was down an average of $3 a day in September for the second consecutive month.
The group predicted that with the recent dip in consumer confidence and jobs, the downward spiral could continue in October.
However, retailers are still expected to hire as many as 480,000 to 500,000 seasonal employees this year, according to the NRF, which is about in line with the 495,000 hired last year.