Shoppers Slowly Start Spending

Holiday sales are not expected to ring in an abundance of cheer.

by staff writer
- Nov 18, 2009

While sales are increasing with more than a week left to go before Black Friday, analysts say this holiday season will not be as merry for retailers as others have in the past.

According to the Johnson Redbook Retail Sales Index, sales increased by 2 percent last week and by 1.7 percent during the first week of November. This follows a 1.4 percent increase in sales during the month of October. However, sales dropped by 2.3 percent in September. With the mixed bag of numbers, the National Retail Federation predicts holiday sales will decline 1 percent this holiday season.

"It seems unlikely that households will be able to spend more freely anytime soon," notes Paul Dales, U.S. economist at Capital Economics.

While consumers are no longer panicked, they are still cautious, says Mark Zandi, Moody's chief economist. "They are spending just enough to keep the economy out of recession, but not enough to fuel a self-sustained expansion."

To draw buyers, several retailers began offering deals before Halloween, not waiting until the usually busy day after Thanksgiving, known as Black Friday. But these pre-holiday sales are only meant to entice buyers, says Jon Vincent, founder of retail-deal aggregator,

Parents will budget, but they won't skimp on toys for their kids

"[With] the early sales, it's a limited amount of products, so rather than finding hundreds of products, you only get a handful," he reports. "The selection is so limited that it really doesn't give consumers the ability to get all their shopping done early."

Shoppers are expected to hit up shops—of both the brick-and-mortar and virtual variety—during Black Friday and Cyber Monday. However sales on those days are only expected to increase 1.8 percent, reports BDO Seidman's, a leading accounting and consulting organization.

"The unemployment rate is weighing on consumers," says Ted Vaughan of BDO Seidman.

That doesn't mean Santa won't be making his usual stops this year. Parents will budget, but they won't skimp on toys for their kids—and 39 percent of retailers expect this category will be the hottest one during the holidays.

"One of the shifts in consumer mentality we've seen is that, more and more, people are focusing on what's important to them," Vaughan says. "They may cut back in other areas, but they won't cut back on toys for their kids."

Only 24 percent of retailers think electronics will be the top category, according to the survey.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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