2010 Holiday Sales Outlook
Retail sales during the winter holiday season represent an indicator of economic activity and consumer sentiment. According to the National Retail Federation, average holiday spending for the weekend following Thanksgiving was up 6.4 percent, with the average holiday shopper spending $365.34. Total spending for the weekend was estimated at $45 billion. Despite the large weekend increase, overall holiday spending is projected to increase by 2.3 percent from last year, with consumers planning to spend an average of $688.87 nationally. Midwestern consumers plan to spend $677.23 for the 2010 holiday season.
Each forecaster uses different methods to predict holiday sales but all of them have predicted an increase this year. The National Retail Federation (NRF) predicts an increase of 2.3 percent in holiday sales to $447.1 billion. The Deloitte & Touche Annual Holiday Survey forecasts a slightly lower increase at 2.0 percent while the International Council of Shopping Centers (ICSC) forecasts a 3.0 to 3.5 percent increase.
NRF’s Holiday Consumer Intentions and Actions Survey reported that consumers plan to spend an average of $688.87 nationwide on holiday gifts alone, with Midwesterners averaging $677.23.
2010 National Retail Federation Projected Midwest Holiday Spending
Deloitte’s survey shows that 15 percent more consumers plan to shop online during the 2010 winter holidays compared to 2009. Over 72 percent of respondents to the Deloitte’s survey indicated that online research would influence holiday purchases. Overall, consumer spending was forecasted to remain tight due to uncertain housing and employment conditions.
According to BIGresearch, over 40 percent of shoppers indicated that price was the most important factor in determining where to shop this holiday season. Another 12.7 percent indicated everyday low prices are the most important. Other consumers rate selection (20.5%), merchandise quality (12.7%), customer service (5.4%) and convenient location (4.9%) as most important.
Black Friday and Saturday, the first two holiday shopping days after Thanksgiving, have been dubbed thus because they represent the days when most retailers traditionally move the bottom line from red (losses) into the black (profit).
According to the NRF’s Black Friday Weekend Survey, Black Friday weekend got off to a swift start with most purchases being driven
by retailers' aggressive discounts to lure buyers into their stores.
Total sales for the weekend topped $45.0 billion, with 212 million people out shopping and visiting online retailers, up from 195 million last year.
The NRF’s Black Friday Weekend Survey, which covers Thursday, Friday, Saturday and Sunday Sales, reported that consumers nationwide spent an average of $365.34. Of those who shopped on Friday, almost one-fourth were in the stores by 4:00 AM.
Black Friday shoppers also spent more on discretionary items. Jewelry sales were up from 11.7 percent of sales in 2009 to 14.3 percent this year.
2010 Top Black Friday Weekend Spending Categories
*The sum of the totals may be greater than 100 percent because the respondents can choose more than one answer.
Many retailers are breathing a collective sigh of relief with the higher-than-expected sales for the start of the 2010 holiday shopping season. The NRF’s Black Friday Weekend Survey shows that 38.6 percent of holiday shoppers have already completed their shopping.
This year’s in-demand holiday items include the Amazon Kindle, smart phones, digital cameras, laptop computers, iPad, Zoobies, Squinkies, Sing-A-Majigs, Leapster, and Loopz. Playstation and Xbox 360 video game controllers are still in high demand.
According to comScore, Inc., a company that monitors internet traffic, Cyber Monday, the first Monday after Thanksgiving, was the biggest online shopping day in history with estimated online sales topping $1 billion. In previous years, Cyber Monday has not been the biggest internet shopping day of the year, which may bode well for sales the rest of this holiday season.
In 2005, Cyber Monday was coined as a marketing gimmick to promote online sales, with the hope that many Americans would purchase gifts online at work. However, today, two-thirds of Americans have broadband connections at home, according to the U.S. Federal Communications Commission, so online shopping is increasingly convenient at home. ComScore predicts that this year, Monday, December 13th will be the busiest internet shopping day of the year.
Extra time to shop may also boost sales this year. The holiday retail season has 29 shopping days between Black Friday and Christmas Eve, one of the longest seasons in terms of the number of spending days.
Still, consumer sentiment toward buying, along with economic and weather conditions, will play a large role in the overall results of retail spending this year. The accuracy of the analysts' predictions will remain to be seen as the holiday season continues.
View the 1999 Actual Spending through the 2010 Holiday Season Spending Forecast prepared by the International Council of Shopping Centers (ICSC) here.
Sources: International Council of Shopping Centers,
National Retail Federation, Deloitte & Touche USA LLP, cnn.com and Com Score, Inc.