Holiday forecast: Optimism with chance of growth

NEW YORK —Cautious optimism may best describe 2010 holiday sales projections, because even as sales inch toward more historical growth levels, there still are significant margin pressures to be expected on account of discount-driven shoppers.

The National Retail Federation has pegged moderate holiday sales growth of 2.3%, to $447.1 billion. It’s a figure that falls short of historical holiday sales growth by 20 basis points, but is a far cry better than the 0.4% growth realized last year, or the 3.9% decline in holiday sales posted in 2008.

Retailers remain cautious because consumer surveys are finding that those shoppers who do plan to participate in gift-giving this year also have reported they will be paying close attention to bargains as compared with years past. According to the 1,000 consumers surveyed as part of SymphonyIRI Group’s “Special Report: Holiday Shopping 2010,” nearly 75% planned to be more strategic this year by comparing prices of items online before making their purchasing decisions, a factor made easier with the prevalence of smart phones in the market.

2010 “Fabulous Toy List”Source: Toys “R” Us
Calico Critters Luxury Townhouse from International Playthings
Cuponk from Hasbro Games
Disney Princess & Me dolls from Jakks Pacific
Disney-Pixar “Toy Story 3” Imaginext Tri-County Landfill from Fisher-Price
Fast Lane Wild Fire RC from Toys “R” Us
Imaginext Bigfoot the Monster from Fisher-Price
Leapster Explorer from LeapFrog
Loopz from Mattel
Minotaurus from Lego Systems
Monster High Cleo DeNile and Deuce Gorgon doll set from Mattel
Nerf N-Strike Stampede ECS from Hasbro
Pillow Pets from Ontel Products
Sing-a-ma-jigs! from Mattel
Squinkies Cupcake Surprise! Bakeshop from Blip Toys
Tomica Hypercity Mega Station Set from Tomy

More consumers deliberately are reducing expenses by spending less on gifts and holiday celebration-related food and beverages, the survey found, as 2010 will see an increase in the number of consumers (23%) who plan to budget no more than $199 this year on gift shopping—up eight points from 2009 (15%) and 12 points from 2008 (11%). “The economy continues to transform, and with that, consumers are evolving,” noted John McIndoe, SVP marketing at SymphonyIRI. “As a result, today’s retail environment is even more complex than we have seen historically.”

A separate NPD Group survey found that only about 1-in-10 consumers planned to spend more this year than last. The majority of shoppers (61%) were planning on spending no more than they did last year. “Even though the recession is technically over, lingering concerns are keeping consumers in a cautious frame of mind,” said Marshal Cohen, chief industry analyst at NPD. “We are seeing what I call ‘calculated consumption,’ and I believe that it is a consumer mindset that will be around after holiday shopping is over.”

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