Photo: Flickr via heatherbuckley
Projections for holiday retail sales have been looking good from most analysts, and retailers are looking optimistic.But there are some big “ifs” that could impact retailers in the most crucial season of the year.
IHS Global Insight U.S. economist Chris Christopher writes in a note this morning:
There are several caveats going into the holiday retail season that need attention, such as the impacts of Hurricane Sandy.
And if there is significant political bickering and finger pointing over fiscal cliff issues, consumer confidence and spending may take a significant hit.
But there’s good news too, and it has to do with the current state of the American consumer.
“The American consumer has been feeling more confident and has been spending a little more,” writes Christopher. “Recent news on the consumer front has been favourable. Consumer confidence has been elevated.”
From the note:
Wage increases are now slightly above consumer price increases, not because wages are growing at a very rapid rate, but because most consumer price increases have slowed considerably. In addition, most Americans have not been much focused on the fiscal cliff; however, that may change in the near term now that the presidential election is over.
Many retailers have already started hard and deep price discounting, and a significant number of chain stores are planning on opening their doors on Thanksgiving Day. The real game changer this holiday season will be the increasing role that e-commerce retail sales will play during the holiday shopping season.
We expect holiday retail sales to rise 4.5% above last year, not as strong as the past couple of years, but a solid showing.
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