Home > political-economy > Forecast: First back-to-back decline in holiday spending on record

Forecast: First back-to-back decline in holiday spending on record

According to MarketwatchNever before have retailers suffered consecutive holiday-sales declines“:

The holiday period represents anywhere between 25% and 40% of the industry’s annual sales and is make-or-break for some categories, such as jewelry shops, according to the NRF.

Archstone Consulting, which on Monday forecast holiday sales would fall 1% after a 2.8% decline a year earlier by its calculation, said this holiday season would likely cap the industry’s first consecutive declines in 40 years, when the compilation of such retail-sales data began.

In addition to a cloudy job picture, demand also has been hurt by a decline in consumer credit and near-record-high savings rate, the consulting firm said.

Faced with forecasts of a tough holiday season, retailers are taking a conservative tack and may opt to keep tight reins on inventory levels this season to avoid the profit-eroding discounts of last year, Archstone said. Inbound cargo, a proxy for retail inventory, is at its lowest level in at least seven years, down about 20% from 2007’s peak levels, Archstone said.

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