Holiday Retail Sales: Good But Not Great

What will the upcoming holiday shopping season look like?

There seems to be plenty of hype about how great the coming holiday season will be, but unfortunately, much of it is overblown, acoording to Economy.com. U.S. retail sales growth this holiday season will likely be the best since 1999. However, much of the year-over-year gains have already been realized, and the very easy comparisons following several weak years will make this year’s sales growth somewhat of a hollow victory. Retailers appear to recognize this fact, as anecdotal evidence points to a little more seasonal hiring than last year, at best, but not a return to normal.

This year, it appears that retailers may hire a few more workers than last year, but will not return to historic seasonal hiring patterns. Sears has indicated it plans to hire fewer workers than last year. Mervyn’s and The Limited plan to hire similar numbers of workers as last year. Bloomingdale’s indicated it will hire more workers. Several retailers indicated they will add workers more slowly due to the increased tendency of shoppers to wait until late in the shopping season to make their purchases. This also gives them the flexibility to cut back on hiring if sales fail to meet plans. After seasonal adjustment, employment may drop again.

Overall, the outlook is positive for retailers this holiday season. Sales growth will be healthy, though those expecting month-to-month growth in retail sales to remain elevated through the holiday season will be disappointed. This year will fall far short of being another 1999.

Economy.com is among the forecasters projecting that retail sales growth this holiday season will be the best since 1999 (see chart below).

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