2011 Holiday Retail Forecasts: sampling the samples

It's no surprise that holiday retail forecasts are quite a mixed bag this year. Economic indicators are all over the place: unemployment claims are falling but so is consumer confidence, stock indices are up and down, foreclosure rates are rising as the housing market shows signs of improving.

So, instead of posting just one or two retail forecasts, I decided to sample the samplers, consultants and trackers to see how their holiday retail forecasts compare. Let's start with a couple of the most recent.

According to today's BDO USA survey release, chief marketing officers at leading U.S. retailers expect a "modest" 2.9% increase in total holiday sales this year. More than half expect to see flat sales, and 37% expect an increase at stores open at least a year. The CMOs also expect Consumer Electronics to be the strongest performing category this holiday season, followed by the categories of Toys, Apparel, Home Goods and Lifestyle Goods.

The U.S. Conference Board also released its findings today. The Conference Board says households will spend an average $497 on gifts this holiday season, 7% plan to spend more, and 50% plan to spend less than last year. Of those surveyed, 10.3% say they plan to spend more on gifts in the Home Decor, Furniture and Appliance category, 39.3% the same, and 50.4% less. 

The National Retail Federation's forecast, released in early October, estimates holiday sales will rise 2.8% this year. The good news is this number is above the ten-year average. The bad news is it's down from last year's 5.2% gain. The reality is the last two years' numbers had no where to go but up (see chart).

The NRF's shoppers say they plan to spend an average of $704 on "holiday gifts and seasonal merchandise," which at first may seem like quite a discrepancy when compared with the U.S. Conference Board's average of $497, until you realize the NRF's $704 includes "seasonal merchandise" - which I assume means holiday decorations, trees, party supplies and foodstuffs.

NRF's holiday survey also found that the average person plans to do 36% of their holiday shopping online - the highest in the survey's history. But, as NRF VP Ellen Davis blogged, this doesn't mean that 36% of purchases will be made online. It means that more than one-third of the time, people will be leveraging the web to research products, find gift ideas and compare prices before making a purchase - either online or in a store. Good to know if you're a small brick and mortar retailer reading this forecast for the first time.

However, online sales are definitely going to have a strong impact. Shop.org's eHoliday survey reveals nearly seven in ten online retailers expect their sales to grow at least 15% this holiday season. And, according to the survey, a record 92.5% of online retailers will offer free shipping this holiday season.

The International Council of Shopping Centers forecasts that holiday sales at U.S. shopping centers will increase by 2.2%. The ICSC said 141,500 people were hired for retail jobs in October, the first month for holiday-season hiring, compared with 144,100 last year (and the ICSC got those numbers from the global outplacement firm of Challenger, Gray & Christmas Inc.)

ShopperTrak, which counts retail foot traffic, says holiday retail sales will rise by 3%, but expects foot traffic to be 2.2% lighter than it was a year ago as shoppers visit fewer stores than in years past. Last week, ShopperTrak released its list of what retailers should plan to see as the 10 busiest shopping days this season. Ranked by sales dollars, highest to lowest, those dates are Nov. 25 (Black Friday), Dec. 17 (Super Saturday), Dec. 23, Dec. 26, Dec. 22, Nov. 26 (Black Saturday), Dec. 18, Dec. 10, Dec. 19 and Dec. 3.

For some analysts, the holiday shopping season looks pretty darn merry compared to last year.

Diane Swonk, chief economist for Mesirow Financial Holdings, expects total holiday sales of general merchandise and apparel to rise 4.5% from a year ago.

Craig Johnson, president of consulting and research firm Customer Growth Partners is looking for a 6.5% rise in holiday sales, the strongest growth since 2004. His reasoning (writing for Chain Store Age):

American households - at least the 91% with jobs - have deleveraged dramatically since 2007, while disposable income continues to rise, generating almost $50 billion/month in incremental free cash flow, even with gasoline price hikes. And after three years of scrimping and saving, Americans are ready to spend - strategically and smartly, but for the first time in years, very few things will stand between an American consumer and her shopping destination. This will be a very happy holiday for most families--and almost all retailers.