By Eric Gursky
So with the 2009 holiday season quickly approaching stores are beginning to unveil new lines and get ready for what is supposed to be a flourishing time of the year. Think again, with the economy still not in shape, consumer spending and credit are nowhere near the rates of 2007. Many stores are buckling up for what could be a scary roller coaster ride.
For the second year in a row retail sales are expected to fall because of rising unemployment which has curbed gift buying. If sales do decline for the second year in a row it will be the first time this has occurred.
The year-end holiday shopping season is a critical one for retailers, and can account for 25 percent to 40 percent of full-year sales. The 2008 holiday was a disaster for retailers, as a financial crisis swept across the globe in September and consumers cut spending on nearly everything but bare necessities.
Faced with bulging racks of unsold merchandise, many retailers resorted to slashing prices 70 percent to 80 percent last year, undermining both four-quarter sales and profits.For an industry that severely suffered in 2008 the last thing they would want to hear is that 40 % of the country plans to spend less overall on gifts this holiday season.
Deloitte is expecting total holiday sales to reach $810 billion -- a zero percent change in November to January holiday sales from a year ago. Flat sales numbers would be a good thing in comparison to the 2008 season which experienced a 2.4 percent decline -- the first decline in , holiday sales dating back to 1967, according to Deloitte.
Source 1, Source 2, Source 3