October 6, 2010 / 4:09 AM / 7 years ago

Retail experts see rosier holiday season

<p>Shoppers attend Black Friday sales in Glendale, California November 27, 2009. REUTERS/Phil McCarten</p>

CHICAGO (Reuters) - Retailers should see their best Christmas sales in four years as consumers now show some inclination to spend money despite a minimal recovery in the economy, according to series of recent forecasts.

Still, discounters are likely to be among the most popular shops because consumers remain cautious, experts said.

The National Retail Federation forecast on Wednesday a 2.3 percent increase in sales in November and December, which would be the best performance since 2006. But even that increase would leave holiday sales below the $452.79 billion posted in 2007, before the housing bubble burst and the stock market tumbled.

Consumers are still selective about what they buy and continue to focus on price, the NRF said. High unemployment a tepid economic recovery have held back spending, even though the recession officially ended in 2009.

“While there might be some economists who have concluded the recession is over, it’s clear that most consumers don’t feel that the recession is over,” NRF president Matthew Shay said during an interview.

The forecast of a 2.3 percent increase compares with a 0.4 percent increase in 2009 and the 3.9 percent decline in 2008.

“What retailers are hoping to get this holiday season is some indication that we have reached a sustained economic recovery and the back-to-school numbers gave us some indication that we are heading in that direction, though in a modest way,” Shay said.

Back-to-school sales in August and September were better than expected, many analysts said, and that has helped lift retail stocks since the end of August. The Standard & Poor’s retail index is up about 16.7 percent, compared with a 10.5 percent increase in the Standard & Poor’s 500.

Retailers have also focused more on paring inventories to avoid deep, margin-sapping discounts, Shay said.

The NRF forecast is not the most bullish for the holiday season. On Tuesday, the International Council of Shopping Centers forecast an increase of 3 percent to 3.5 percent compared with 2.3 percent last year.

Among other recent forecasts, consulting firm Deloitte forecast a 2 percent increase in the November through January holiday period, better than 1 percent a year ago.

The holiday season traditionally begins on “Black Friday,” the day after Thanksgiving. But retail industry executives say consumers have begun shopping for the holidays earlier in recent years to spread out their spending and take advantage of sales when they see them.

Also, a survey by consulting firm Accenture reinforced the view consumers are still frugal. Most consumers are not moved to purchase without a discount of 20 percent or more and more than one quarter require a discount of 50 percent or more. In fact, 81 percent of consumers said they would shop at discount stores for the holidays.

On the whole, 83 percent of those surveyed expect to spend the same or less on holiday gifts this year than last year, Accenture added.

Reporting by Brad Dorfman; editing by Andre Grenon

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