National Retail Federation Predicts "Average" Holiday Spending

The National Retail Federation (NFR) made the prediction that the 2011 holiday season will be “average” and that retail stores will hire approximately a half-million additional workers for the holidays.

The 2010 holiday season did much better than originally expected, so the NFR prediction that the holiday sales are expected only to be average could be a disappointment to many. While businesses are still concerned about the state of the economy, they are still in a better position to handle consumer uncertainty than they were in 2008 and 2009.

High unemployment numbers, an unpredictable stock market, modest income growth, and ever-increasing prices for consumers are all working together to negatively impact holiday spending. Nonetheless, consumers still appear determined to proceed with their holiday shopping plans.

CBS News report that stores are not waiting until the last six weeks before Christmas. The difficult economy paired with the “average” NFR report is compelling retailers to push Christmas earlier than ever. For weeks now, stores have offered their Halloween candy and costumes next to the Thanksgiving aisle, which is next to the Christmas aisle.

Pam Goodfellow, Consumer Insights Director for BIGresearch, which conducts studies for NRF, explains, “in 2009, it was all about personal and practical and last year consumers wanted to treat their loved ones to something special; this year, it's a little bit of both. Limited budgets and a desire to make the most out of gift-giving will drive consumers to shop at a variety of retailers while also thinking outside the box for great gift ideas."

Retailers are hoping that strong promotions paired with lean inventory levels will help counter the uncertainty in consumer spending. Consumers should expect to see outrageous deals this year, as retailers do what they can to draw shoppers into their stores.

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