RAPAPORT... After the National Retail Federation (NRF) predicted that retail sales would climb 4 percent for the traditional Christmas shopping season in fourth quarter, the group concluded the increase is not bad news. The average annual increase for the past 10 years has run closer to 5 percent.
Overall sales are expected to climb to about $478 billion, according to NRF, which if true would be the slowest holiday spending increase since 2002. Christmas holiday sales in the United States can account for between 20 percent and 25 percent of sales for a given retailer.
During a conference call, NRF's executive director of shop.org, Scott Silverman added that even compared with 2002 the expectation for growth is strong. “While this may not be the rosiest prediction, this is certainly not a ‘sky is falling’ mentality,” he said. “Consumers will be more conservative in their holiday spending, but they will still be out shopping.”
Diamond jewelry, fashion jewelry, and evening wear are expected to be hot items for women, concluded NRF. Clothing designed to hold a variety of high tech devices (Blackberry, iPod, cell phone, etc.) are in strong demand as well. “Whether its sweaters or vests designed to hold handheld accessories and iPods, or handbags, which are designed for these devices, we are going to see a lot more of these kinds of products this season,” said Dan Butler, vice president of NRF's merchandising and retail operations.
Gift cards, of course, will continue to be as hot as ever the group concluded.
Retailers are also jumping on the bandwagon to open-up shop in airports. Seattle and Newark, both top spots for travelers, have opened retail areas ahead of the holiday season to boost sales. With expected longer flight delays (and unexpected travel delays) airport management and retailers alike hope to keep travelers occupied by browsing storefronts.
"I was kind of surprised to see jewelry here," Jackie Steven of Aberdeen, Scotland, told the Associated Press during a preflight shopping spree at Newark Liberty International Airport. Jewelry is one of many offerings popping up across the nation's airports. Jewelry in particular is small enough to have no impact on a traveler's carry-on restrictions.
In response to long layover time, airports have improved their offerings and in some cases implemented pricing policies as part of the leasing agreement that state retailers may not charge more for goods than they would for the given city, according to one report by the Associated Press.
"What's important about airport traffic is the volume of travelers," Butler said. "It's ... new traffic every day."
"They also do a lot of things that are giftable," he added.
In a separate report, the NRF along with Global Insight found that unit of goods being shipped for the start of Christmas holiday season in the United States were down 1.4 percent at the nation's seaports. August was the most recent month for collecting actual data, but preliminary stats for September show a 2 percent drop in units of goods (for all consumer products) at the nation's ports.
Global Insight analyst Paul Bingham told Logistics Management magazine shippers can expect smooth sailing for the fourth quarter though.
“The weak economy is affecting shipment volumes as much as their own sales volumes, so the slow pace of port traffic growth will continue until the economy turns around,” he said.
Additional reporting by Dialog NewsEdge.