As per predictions by Deloitte and TNS/Retail Forward, it’s going to be the worst holiday shopping season for US since the 1991 recession. An analyst from Strom Exchange future analyzed that as temperature is getting cooler tear on year, it will hit retail in holiday season negatively there.
They forecasted that 2008 holiday season will generate the weakest sales gains in 17 years. TNS forecasted that retail sales will grow by 1.5% where as Deloitte is slightly more optimistic and predicts sales for the November-January period will increase 2.5% to 3%. However both of them have not included recent turmoil at Wall Street, which is supposed to again hit retail specially luxury segment negatively. Last year, holiday sales grew 3%, the smallest increase since 2002. Deloitte highlighted higher gas and food prices as a major cause which will reduce trips to shopping malls.
Analysts say the recent decline in oil prices will be offset by higher unemployment, higher food prices and the continued slump in the housing market. Declining prices at the pump are expected to be offset by higher winter heating costs.
Season is going tough for major department stores such as Macy’s and JC Penney. Upscale retailers such as Saks and Nordstrom will also suffer. But discounters like Wal-Mart and Target are likely to benefit as shoppers will look for more bargains.
- 
Rajeev Damani 
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