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Tuesday, 16 September, 2008 2:17 PM
Deloitte Forecasts
2.5 to 3.0 Percent Increase in 2008 Holiday Spending
Consumers
Are Focused on Value; Innovative Approaches Can Help Retailers
Photo
courtesy of www.moneypit.com
NEW
YORK -- With many economic factors weighing
heavily on consumers' minds and wallets, retailers should expect
only a
modest increase in holiday sales over the 2007 season, Deloitte
forecast
today.
"Higher
energy and food prices are making a dent in consumers' wallets,
and the dramatic drop in home mortgage refinancings has dried up
a
substantial source of discretionary funds," said Carl Steidtmann,
chief
economist with Deloitte Research, a subsidiary of Deloitte Services
LP. "In
addition, continued softness in the housing market, rising unemployment
claims and a volatile stock market are negatively affecting consumers'
perceptions of the economy, their wealth, and their ability to spend.
In
all, these factors will likely lead to a challenging holiday season."
Deloitte's
Retail group expects holiday sales, excluding motor vehicles
and gasoline, to increase 2.5-3.0 percent during the November-to-January
period, less than last year's 3.4 percent increase, and one of the
smallest
gains since 1991's 2.0 percent uptick.
"Consumers
are in a cost-conscious mood and more focused on value than
ever before," said Stacy Janiak, Deloitte's US Retail leader.
"Retailers
that can offer unique value propositions - in terms of price, customer
service, loyalty programs, or some other means - will be best positioned
to
attract the consumer's attention. For example, many time-strapped
consumers, who are now also feeling the pinch of higher gas prices,
are
seeking to make fewer shopping trips and may therefore be attracted
by an
efficient, streamlined multichannel shopping experience."
"Retailers
can also take advantage of innovative marketing concepts,
such as pop-up stores and an emphasis on 'green.' These creative
approaches
may resonate with consumers, bring shoppers into stores and attract
new
customers, thus helping expand a retailer's customer base."
Janiak also
commented that retailers appear to be positioned well
heading into the holiday season, with low inventory-to-sales ratios
and
payrolls and other costs that are in check. These measures are particularly
important given the extensive promotions expected this holiday season,
and
will hopefully offset some of the impact on retailers' bottom lines.
Source:
Deloitte LLP
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