"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.
1 comment:
Strength of the YEN to the USD could also be a big wildcard on the prices of goods this holiday season.
They can keep prices level and loose more profits and they may not be able to discount as heavily as in the past.
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