Garden centers should gear up for a better holiday sales season, according to industry watchers. But expect consumers to be cautious with spending.
From National Retail Federation:
After a ho-hum 2009 and a disastrous 2008, holiday retail sales are expected to increase a more moderate 2.3 percent this year to $447.1 billion, according to the National Retail Federation. While that growth remains slightly lower than the ten-year average holiday sales increase of 2.5 percent, it would be a marked improvement from both last year’s 0.4 percent uptick and the dismal 3.9 percent holiday sales decline retailers experienced in 2008.
“While many consumers will be wishing for apparel and electronics this holiday season, retailers are hoping the holidays bring sustainable economic growth,” said NRF president and CEO Matthew Shay. “Though the retail industry is on stronger footing than last year, companies are closely watching key economic indicators like employment and consumer confidence before getting too optimistic that the recession is behind them.”
Much like they have in previous years, retailers are expected to focus on supply chain efficiencies and inventory control this holiday season to limit their exposure to excess merchandise and unplanned markdowns. Companies are also expected to leverage new channels – like mobile – to drive sales and provide added service to customers who want to shop anytime, anywhere.
“While consumers have shown they are once again willing to spend on what’s important to them, they will still be very conscientious about price,” said NRF chief economist Jack Kleinhenz. “Retailers are expected to compensate for this fundamental shift in shopper mentality by offering significant promotions throughout the holiday season and emphasizing value throughout their marketing efforts.”
NRF’s holiday sales forecast is based on an economic model using several indicators including employment, industrial production, disposable personal income and previous monthly retail sales reports. The retail climate has been uneven for most of 2010 as sales have not been able to maintain momentum due to concerns about the viability of the economic recovery.
From NPD Group:
The findings from NPD Group’s ninth annual survey of consumers’ holiday spending intentions suggests that consumers will approach this holiday shopping season with care.
The majority of consumers say they plan to spend about the same as last year, 61 percent this year, up 2 points from last year. About one-third of survey respondents say they plan to spend less, which is the same as last year; and only 9 percent say they plan to spend more, down 2 points from 2009.
“Even though the recession is technically over, lingering concerns are keeping consumers in a cautious frame of mind,” said Marshal Cohen, chief industry analyst for the NPD Group. “We are seeing what I call ‘calculated consumption.’ and I believe that it is a consumer mindset that will be around after holiday shopping is over.”
Evidence of consumers’ more thoughtful and cautious approach this holiday can be seen in the fact that 62 percent of consumers say they plan to do some kind of ‘homework’ prior to making a purchase. Almost 44 percent of consumers say they will comparison shop before they buy a gift. Thirty-seven percent say they will use ads or circulars to guide their gift shopping, and 33 percent say they will compare prices online before they shop in a store.
“What this means is consumers will be looking to find what to buy, when to buy, and where to buy before even leaving the house,” said Cohen. “This eliminates the rushed decisions and can potentially eliminate some impulse purchasing from the holiday shopping equation.”
The primary influence on where consumers will shop for gifts this year remains ‘price’ (60 percent). ‘Special sale price’ came in second with 58 percent, followed by ‘convenient location’ at almost 47 percent.
