Approaching a holiday shopping season critical to economic recovery, US retailers are bracing for a difficult period with credit still tight and consumer caution lingering.
Many early projections suggest retail spending in the final two months of the year — a season that accounts for a large proportion of sales and profits — will be flat or lower.
Consulting group Deloitte expects total holiday sales to be around US$810 billion excluding cars and gasoline, unchanged from a year ago.
That would be better than last season’s 2.4 percent decrease, which was the first decline since 1967, Deloitte said.
“Although there are signs that suggest the economy is nearing the end of its darkest days, many consumers remain burdened by restricted credit availability, high unemployment and foreclosures,” said Carl Steidtmann, chief economist with Deloitte Research. “Americans continue to save at historically high rates, while also paying down debt, and these factors combined suggest another chilly holiday season for retailers.”
Others point out that retailers are being squeezed by tight credit that prevents them from stocking up as much as they might like, and the concern that consumers will pull back further.
“Retailers are still caught between a rock and a hard place,” said Ted Vaughan, partner in the consultancy BDO Seidman LLP. “Reducing inventory is necessary, but retailers run the risk of hindering selection, which can lead to disappointed customers and fewer sales. On the other hand, merchandise overflow can lead to a frenzy of deep discounts, which can cheapen the brand and slash profits.”
The research firm Retail Forward also expects flat spending over the holiday season, saying it would be the worst in 42 years behind last year’s tumble.
The group sees apparel and home furnishing sales falling 2 percent compared with last year, and grimmer results for consumer electronics stores.
Sung Won Sohn, economist at California State University, said there was a danger of an economic relapse if retailers and consumers remain gripped by fear.
“Expecting weak economic recovery in demand ahead including the upcoming holiday shopping season, the employers are in no mood to start hiring,” Sohn said. “They want to make sure that a sustained economic recovery is here before hiring. This type of fear could undermine the budding economic recovery.”
A slightly more upbeat outlook came from the International Council of Shopping Centers, which projects a 1 percent increase in same-store sales next month and December. With January included, sales may rise 1.5 percent, their best performance in three years, ICSC said.
“Retailers will experience their first non-recession holiday season in three years, and economic growth is fundamentally on the mend, even though there will be lingering pockets of weakness,” ICSC chief economist Michael Niemira said. “The wear and tear of the recession and financial crisis on the consumer psyche are slowly giving way to renewed hope, optimism and most likely gift buying.”
Joel Naroff at Naroff Economic Advisors said prospects remain bleak unless confidence improves.
SEPARATE: The MAC rebutted Beijing’s claim that Taiwan is China’s province, asserting that UN Resolution 2758 neither mentions Taiwan nor grants the PRC authority over it The “status quo” of democratic Taiwan and autocratic China not belonging to each other has long been recognized by the international community, the Mainland Affairs Council (MAC) said yesterday in its rebuttal of Beijing’s claim that Taiwan can only be represented in the UN as “Taiwan, Province of China.” Chinese Minister of Foreign Affairs Wang Yi (王毅) yesterday at a news conference of the third session at the 14th National People’s Congress said that Taiwan can only be referred to as “Taiwan, Province of China” at the UN. Taiwan is an inseparable part of Chinese territory, which is not only history but
NATIONAL SECURITY: The Chinese influencer shared multiple videos on social media in which she claimed Taiwan is a part of China and supported its annexation Freedom of speech does not allow comments by Chinese residents in Taiwan that compromise national security or social stability, the nation’s top officials said yesterday, after the National Immigration Agency (NIA) revoked the residency permit of a Chinese influencer who published videos advocating China annexing Taiwan by force. Taiwan welcomes all foreigners to settle here and make families so long as they “love the land and people of Taiwan,” Premier Cho Jung-tai (卓榮泰) told lawmakers during a plenary session at the Legislative Yuan in Taipei. The public power of the government must be asserted when necessary and the Ministry of
CROSSED A LINE: While entertainers working in China have made pro-China statements before, this time it seriously affected the nation’s security and interests, a source said The Mainland Affairs Council (MAC) late on Saturday night condemned the comments of Taiwanese entertainers who reposted Chinese statements denigrating Taiwan’s sovereignty. The nation’s cross-strait affairs authority issued the statement after several Taiwanese entertainers, including Patty Hou (侯佩岑), Ouyang Nana (歐陽娜娜) and Michelle Chen (陳妍希), on Friday and Saturday shared on their respective Sina Weibo (微博) accounts a post by state broadcaster China Central Television. The post showed an image of a map of Taiwan along with the five stars of the Chinese flag, and the message: “Taiwan is never a country. It never was and never will be.” The post followed remarks
Proposed amendments would forbid the use of all personal electronic devices during school hours in high schools and below, starting from the next school year in August, the Ministry of Education said on Monday. The Regulations on the Use of Mobile Devices at Educational Facilities up to High Schools (高級中等以下學校校園行動載具使用原則) state that mobile devices — defined as mobile phones, laptops, tablets, smartwatches or other wearables — should be turned off at school. The changes would stipulate that use of such devices during class is forbidden, and the devices should be handed to a teacher or the school for safekeeping. The amendments also say
RSS