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ABOUT THIS BLOG

It's a make-it or break it time for retailers. The holiday selling season is always a critical time for retailers, but this year this may be even more true. With several retailers already falling victim to a drop in consumer spending, and filing for bankruptcy, retailers will be navigating through some tricky waters. Consumers are strapped for cash due to high energy and food prices, and unemployment is rising. The recent credit crunch has made it more challenging for retailers and consumers to borrow.

This blog will look at the winners and losers in the retail space. Who has the right strategy to capture consumer dollars? It also will look for trends in consumer spending and how that will impact the economy.

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Oct.08

3:59 PM ET

Wednesday, 8 Oct 2008

Santa Sitting With the Pumpkins

Posted By:Christina Cheddar Berk

Topics:Marketing | Consumers

Sectors:Retail

Companies:Wal-Mart Stores Inc

The leaves on the trees have hardly started to turn colors, but some folks are already dreaming of a white Christmas.

AP
Last year about 40 percent of people started their holiday shopping before Halloween, according to BIG Research. That’s one reason why you’ll see Santa cozying up to pumpkins at the store. Retailers are bracing for a dismal holiday season and know they can’t afford to miss a single sale.

This is because the vast majority of consumers polled by BIG Research — some 60 percent — said they expect to spend the same or less than they did last holiday season. (And that’s only counting the people who have some idea of what they will spend now – some 21 percent said it was too early to gauge their spending. There’s a good chance some of those folks will spend less than last year too.)

All told, the National Retail Federation forecasts sales will rise only 2.2%, or the smallest increase since 2002. Other projections are even worse: market researcher TNS Retail Forward expects sales to rise just 1.5% in the fourth quarter, below tepid sales gains in the third period.

And analysts clearly expect retailers will be looking to lure customers into their stores with sales and promotions, putting pressure on profits.

Investors take note: Wal-Mart [WMT Loading... () ] is stealing a page from last year’s playbook. The world’s largest retailer announced last week it is slashing prices on popular toys and accelerating the opening of its Christmas shops.