Industry News
Retail Forward Expects Flat Retail Sales in 4Q
24/09/2009
Retail sales in the U.S. are expected to fall flat in the fourth quarter of 2009 compared with one year ago, according to Retail Forward. The research and consultancy firm noted that with sales on par with 2008, the holiday season will rank as the second-worst experienced in 42 years when measured in terms of growth rates. Retail Forward did, however, conclude that sales improvement would gain strength in 2010 and should approach long-term average growth rates by the end of that year.
“The emerging recovery will be driven by growing confidence among households in response to, among other things, subsiding job cuts by businesses,” said Frank Badillo, the senior economist for Retail Forward. “Businesses, in turn, are taking their foot off the brakes in light of leaner inventories and expectations that pent-up demand and economic stimulus will soon require new business investment.”
Retail Forward predicted flat growth for the fourth quarter, compared with sales declines of 4.5 percent in the final three months of 2008. Badillo noted that softer sales declines were already evident in August, signaling an emerging retail recovery that will be driven by growing consumer confidence.
“This is positive news as we move into the critical holiday season, but the economic environment will remain difficult,” Badillo adds. “Sales declines will persist for specific retail channels — particularly apparel and home goods —but will end for aggregate measures of retail sales.”
Retail Forward forecasted that sales of apparel and accessories would fall about 2 percent, compared with a drop of 9 percent in 2008. Mass retailers, including discount department stores, supercenters, warehouse clubs and small-format value stores, are expected to see sales growth of 2.5 percent. The company said it expects online retail sales to grow 4 percent after declining 5 percent in 2008. The research group did not provide a separate forecast for the jewelry retail segment.
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