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Holiday sales expected to rise 3.9 percent: NRF

Thursday, 3 Oct 2013 | 12:00 AM ET
Shoppers at a mall in Columbia, Md.
Getty Images
Shoppers at a mall in Columbia, Md.

While calling for a modest rise in holiday sales this year, a retail industry trade group cautioned that the next 45 days could make or break the season.

"Our forecast is also somewhat hinging on Congress and the administration's actions over the next 45 days," said Matthew Shay, president and CEO of the National Retail Federation. "Without action, we face the potential of losing the faith Americans have in their leaders, and the pursuant decrease in consumer confidence."

(Read more: Obama to Wall Street: This time be worried)

Shay's comments came as the group issued its annual holiday sales forecast, which predicts holiday sales will rise 3.9 percent, to $602.1 billion, as consumers face economic headwinds and the impasse in D.C. The estimate is slightly higher than last year's 3.5 percent growth and the 10-year average holiday sales growth.

"Our forecast is a realistic look at where we are right now in this economy—balancing continued uncertainty in Washington and an economy that has been teetering on incremental growth for years," Shay said in a statement. "Overall, retailers are optimistic for the 2013 holiday season, hoping political debates over government spending and the debt ceiling do not erase any economic progress we've already made."

Historical holiday sales

Year Holiday Retail Sales (in millions) Holiday Sales Change
2013* $602,120 3.9%
2012 $579,493 3.5%
2011 $560,180 5.1%
2010 $533,118 5.3%
2009 $506,303 0.5%
2008 $503,805 -4.4%
2007 $527,046 2.8%
2006 $512,883 3.3%
2005 $496,332 6.2%
2004 $467,339 6.8%
2003 $437,704 5.1%
2002 $416,416 2.1%
2001 $407,788 2.07%
*Forecast Source: National Retail Federation

Consumer balancing act

Throughout the year, consumers have faced a long string of concerns, including continued high levels of unemployment, the expiration of a 2 percent payroll tax cut and higher gas prices. The recent partial government shutdown and looming debt ceiling are compounding the problem. Balancing out these concerns are several positives for the consumer, including a strong stock market, rising home values and more jobs.

This environment has produced what Citigroup analyst Deborah Weinswig in late August called a "C.H.E.A.P." consumer, one more interested in spending on cars, housing, e-commerce, appliances and home projects than on apparel or electronics. She expected the trend to last into the second half of the year.

(Read more: Despite ho-hum holiday forecasts, Walmart's hiring)

The NRF release follows a handful of forecasts for moderate holiday sales growth.

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The increase in e-commerce is prompting some big box retailers to hire additional full-time workers. The "Squawk on the Street" crew share their thoughts on the retail space.

Deloitte predicted that sales would rise between 4 percent and 4.5 percent in the November to January period, to $963 billion to $967 billion. That's in line with the 4.5 percent the firm saw last year.

Alix Partners forecast sales would increase 4.1 percent to 4.9 percent from last year, when the effects of Superstorm Sandy dampened retail sales growth.

Meanwhile, ShopperTrak forecast that retail revenue would rise only 2.4 percent this holiday season.

Online sales seen more robust

The NRF's digital division expects online sales to be more robust as savvy buyers migrate to the Web looking for deals and value. It forecast growth of 13 percent to 15 percent—up to $82 billion—in November and December. Its prediction last year was for online growth of 12 percent.

(Read more: Amazon bucks the cautious holiday hiring trend)

This is roughly in line with Deloitte's expectations for 12.5 percent to 13 percent growth in nonstore sales, which include online, catalog and interactive TV purchases.

As retailers begin to ramp up their seasonal hiring for the holidays, the NRF expects nowhere near last year's hiring frenzy. It projects hiring growth of between 0 percent and 8 percent, or between 720,000 to 780,000 workers, compared with last year's 13 percent gain in seasonal employees.

Retailers are proceeding cautiously so far, with GameStop, Kohl's and Toys R Us planning to add roughly the same number of extra workers they did last year and Target announcing that it will add fewer.

Several companies, including Amazon, Wal-Mart and Macy's, singled out plans for their online fulfillment hiring as Web shopping continues to outpace overall sales growth for many stores.

—By CNBC's Katie Little. Follow her on Twitter @KatieLittle.

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