The National Retail Federation released its forecast for the upcoming 2008 holiday season,
projecting that sales will rise 2.2 per cent this year to $470.4 billion. This
gain would fall well below the ten-year average of 4.4 per cent holiday
sales growth and would represent the slowest growth since 2002, when
holiday sales rose 1.3 per cent.
“Current financial pressures and a lack of confidence in the economy will force shoppers to be very conservative with their holiday spending,” said NRF Chief Economist Rosalind Wells. “We expect consumers to be frugal this season and less willing to splurge on discretionary items.”
A number of economic indicators point to a challenging holiday for retailers. A struggling housing market and rising unemployment accompanied by meager income gains will continue to hamper the consumer throughout the season. Food and energy costs will remain high. With the current financial industry crisis continuing to chip away at consumer confidence, NRF does not foresee an economic turnaround until the second half of next year.
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