"Retail executives are expecting this to be the toughest holiday season in more than 15 years," said Doug Hart, a partner in BDO Seidman's retail and consumer products practice. The pessimism is "pretty broad across all the categories," except at discounters, which typically do well in an economic downturn.
Thirty-nine percent of the executives said they expect same-store sales to decline this holiday season, 41% said they expect flat sales and 20% said they expect sales to rise. Last year, only 5% of chief marketing officers told BDO Seidman that they expected sales to fall and 41% said they expected to ring up higher sales.
In a more ominous sign, 65% of the executives said they don't expect to see a meaningful economic turnaround until the third quarter of 2009 at the earliest. The survey, conducted Sept. 22 through Oct. 17, involved executives at retail companies with sales of more than $100 million, said BDO Seidman, an accounting and consulting firm.
This shoudn't be a surprise. However, let's put a few pieces together to tell the complete tale.
The year over year rate of employment growth has been dropping for about 2 years.
Unemployment has been rising for about a year and 3/4. Therefore there is less money being made leading to
A drop in personal consumption expenditures. A subset of this data is retail sales
which are also dropping sharply.