Survey: Holiday sales to hit $519 billion; strongest growth will be in electronics
New York City -- Holiday retail sales will grow by a strong 4.5% [+/- 0.5%] year-over-year to a record $519 billion, according to retail consulting and research firm Customer Growth Partners, New Canaan, Conn.
“Consumers have endured over two years of economic body blows, but have been slowly picking themselves off the mat since last year, despite the employment woes,” said Craig Johnson, president Consumer Growth Partners (CPG). “The 83% of Americans with full-time jobs are beginning to spend again, and they will drive retailers to the best year-over-over holiday sales growth since 2005.”
CGP’s 4.5% forecast for the November-December holiday shopping season is above consensus estimates of 2% to 3% growth (National Retail Federation has forecast growth of 2.3%). The CGP forecast includes direct-to-consumer sales, primarily e-commerce sales, which are excluded in NRF’s forecast. Direct sales have been the fastest growing segment of retail since the 1990’s, and in 2009 represented some 10% of total holiday sales.
- Among merchandise categories, the strongest growth will come in electronics and appliances, up some 6%, led primarily by e-reader, iPad and mobile phone growth -- and secondarily by major appliances, which will exceed their surprise performance at last year’s Black Friday sales.
- Pent-up demand will drive home-related categories to their strongest growth in half a decade, over 5%, including both home-furnishings and home-improvement retailers.
- Discount and other value retailers will continue to shine in holiday 2010, led by off-price retailers such as TJX and Ross Stores, low-priced “fast fashionistas” such as Forever 21 H&M and Love Culture, and big boxers such as Costco and an outperforming Target.
- Sweaters will remain the single most common holiday gift -- and may well see a sharp increase as consumers stock up before near Civil War record cotton prices work their way through the supply chain early next year.
- Traditional holiday retail categories will enjoy a stellar year, including luxury segments such as jewelry, and toys, where expanded distribution -- e.g. Toys “R” Us’ pop-up stores -- and strong competition from Walmart and Target will drive sales.