NRF Forecasts “Average” Holiday Sales

The National Retail Federation says it sums of expectations for the 2011 holiday season with one word: average. Holiday retail sales are expected to increase 2.8 percent to $465.6 billion, following the 2010 holiday season that outperformed most analysts’ expectations with a 5.2 percent increase. Still, the 2011 estimate is slightly higher than the ten-year average holiday sales increase of 2.6 percent, according to the NRF.

“Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season,” says NRF president and ceo Matthew Shay. “While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009.”

Continued consumer uncertainty over the stock market, higher gas and food prices, fiscal policy and sputtering job growth are factors impacting spending this year. “How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel,” says NRF chief economist Jack Kleinhenz.

NRF’s holiday sales forecast is developed based on an economic model using several indicators including consumer confidence, consumer credit, disposable personal income and previous monthly retail sales releases.