Pressed by fluctuating energy prices, tumultuous credit and housing markets and uncertainty over the presidential election, consumers will stay conservative with their shopping this holiday season, retail analysts said.
The National Retail Federation on Tuesday said holiday sales would rise 2.2 percent this year to $470.4 billion. The gain would represent the slowest growth since 2002, when holiday sales increased 1.3 percent, and would fall well below the 10-year average of 4.4 percent growth.
“Retailers are going to have their work cut out for them this holiday season,” said Scott Krugman, NRF spokesman.
“We think the current weak economic environment is going to challenge all retailers, including luxury retailers,” Krugman said. “In an economy like this, all retailers become discount retailers to a degree.”
Last year, holiday sales rose 3 percent to $469.9 billion after the NRF predicted sales would increase 4 percent to $474.5 billion.
Multiple economic factors contributed to the NRF’s weak forecast, Krugman said. Rising food and energy prices, the struggling housing and credit markets, weak consumer confidence and the problems on Wall Street are all weighing on consumers’ minds and wallets.
“Consumers are getting hit from all sides,” said Phil Rist, vice president of strategy for Ohio-based BIGresearch, a consumer research firm. “The consumers are under a lot of pressure, and going into the holiday season, the retailers that understand that … will be the most successful.
The meager holiday sales forecast was released a day after Chicago-based General Growth Properties, the country’s second-largest shopping center owner, said it would consider selling some of its assets to shore up its mounting debt.
GGP, which owns eight Maryland shopping centers, including Harborplace, Owings Mills Mall and The Mall in Columbia, is facing billions of dollars in debt over the next few years.
Also a sign of the times for retail spending, department store chain Boscov’s in August filed for bankruptcy and announced the closure of its Baltimore-area locations in Glen Burnie, Owings Mills and White Marsh.
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