A Very Different Christmas Holiday Forecast: A Dismal Outlook
Another day another holiday forecast, but this time the tone is entirely different.
We've already seen forecasts for the Christmas holiday season that have predicted both amodest increase in consumer spending and retail holiday hiring. But America's Research Group's preliminary forecast tells a much different story, and it's not a tale retailers are going to want to hear.
A record high 43 percent of American shoppers plan to spend less during the last quarter of the year than they did in 2009, while only 11.0 percent expect to spend more this Christmas season, according to the group's research.
"Pessimism among Americans about the upcoming Christmas season is off the charts," said C. Britt Beemer, founder and CEO of America's Research. So much so, Beemer opted to release the results of this preliminary survey—something he has never done.
Beemer, who has a strong track record of accuracy with such forecasts, said he typically waits until November to issue his holiday forecast. But since he was overwhelmed by the negativity expressed in the responses he decided to release the results.
His official spending forecast will be issued shortly after the November elections, he said.
One of the things that most startled Beemer was how many consumers were responding to the survey questions with political answers. For example, some said they were planning to spend less this holiday season because they were concerned about massive government debt and because the country was heading in the wrong direction, as opposed to being fearful for their jobsor overburdened by their own personal debt.
To put these results into perspective, when Beemer polled consumers two years ago, during the financial crisis, consumers planned to spend less by a ratio of 3-to-1. This year, the responses are negative by a ratio of about 4-to-1—something Beemer hasn't seen in the more than 25 years he has been conducting this holiday survey.
According to Beemer, many of the Americans he surveyed were also concerned about new foreclosures that they are seeing in their neighborhoodand the feeling that their local economies are not improving.
Beemer said he expects the dismal forecast may moderate somewhat as the holiday approaches, but even if that occurs, it may not be good news for retailers, especially those who are feeling more optimistic about consumer spending.
Macy'sreported earlier today that they are among those retailers that will be hiring more this holiday season. The department store chain plans to add about 65,000 seasonal workers this year, a "slight increase" from last year.
Macy's also said it expects its same-store sales will rise by 3 to 3.5 percent in the second half of its fiscal 2010.
The December holiday season is typically the most important time for retailers as it is when they make the bulk of their revenue and profits.
If Beemer is correct, it will be tough for retailers to see positive results this year.
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