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ENLARGE
Shoppers visit a J.C. Penney store in New York on Feb. 19, 2015. Americans are expected to spend 3.3% more at physical stores this holiday season.
Photo:
Associated Press
By
Imani Moise and
Suzanne Kapner
Suzanne Kapner
The Wall Street Journal
CANCEL
- Biography
- Suzanne.Kapner@dowjones.com
Updated Oct. 4, 2016 1:27 p.m. ET
Two retail trade groups forecast that holiday spending will increase at a faster pace this year, an upbeat outlook for the important year-end shopping frenzy, even as the election and unpredictable weather could derail the expected gains.
The National Retail Federation on Tuesday said it expects total holiday sales excluding autos, gas and restaurant sales will increase 3.6% to $655.8 billion, slightly higher than the postrecession average of 3.4% since 2009. Last year, holiday spending fell short of the NRF’s 3.7% forecast, coming in at 3.0%.
Read More
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- Shoppers Flock to Apps, Shaking Up Retail (April 13)
- Retailers Bet Big on Retooling Their Supply Chains for E-Commerce (Jan. 28)
- Holiday Sales Rise, but Not All Retailers Are Cheery (Jan. 7)
Matthew Shay, the NRF’s chief executive, said this year’s presidential election could be a curveball. “Certainly one of the candidates has done an enormous job of trying to talk down the current state of America,” Mr. Shay said. “If you believe one of those candidates, you’d think things were terrible out there and why should we spend anything.”
The International Council of Shopping Centers also gave a rosy projection, forecasting a 3.3% spending increase at physical stores, compared with a 2.2% gain in sales last year. Holiday shoppers in the survey said they plan to spend an average of $683.90 this year. The numbers are based on an online survey of about 2,000 adults conducted from Sept. 19-22.
“We continue to see positive consumer spending intentions ahead of the holiday season,” said Tom McGee, the ICSC’s chief executive.
Consumer spending has been strong this year as Americans have benefited from low inflation, rising wages and high levels of employment. But people are shifting spending online and making fewer trips to stores, according to retail executives. While holiday sales rose last year foot traffic fell, according to data released in January by RetailMetrix, which collects data through software provided to retailers.
Consumer spending patterns have been shifting from the accumulation of goods normally bought in retail stores to services and experiences like travel, entertainment and food. “That will continue and become a bit of an issue from a retail spending standpoint,” said Jack Kleinhenz, the NRF’s chief economist.
In addition, Mr. Kleinhenz said that lower prices have allowed shoppers to spend less on the same goods, presenting a challenge for retailers who must sell more merchandise to show an increase in sales.
The NRF projected that non-store sales, including purchases made online, will increase between 7% and 10% to as much as $117 billion.
In the ICSC survey, shoppers often cited the ability to try on clothing, return easily, and avoid shipping fees as reasons they planned to shop in stores for the holidays, however 85% of shoppers said they would browse online first before going to the store to shop and 59% said they planned to spend at Amazon.com Inc.
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Seasonal hiring is expected to remain flat according to the NRF.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com
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