| LOS ANGELES
LOS ANGELES Dec 3 A leading consumer research
firm slashed its 2008 holiday retail sales forecast to a 3.5
percent drop from last year on Wednesday, far worse than its
previous call for a 1 percent decline.
America's Research Group said the move follows
"disappointing" Black Friday survey data showing that shoppers
were sticking to budgets and checking gifts off their lists by
snapping up deeply discounted doorbuster specials.
On Nov. 12, company founder and Chief Executive Britt
Beemer forecast that the shrinking U.S. economy would usher in
the first decline in holiday sales in almost a quarter century
of holiday spending surveys. On Nov. 30, he said he expected to
lower his estimate.
"I thought I was going to reduce my forecast but I thought
I was going to go to minus 2 versus minus 3.5," he told Reuters
in an interview.
"When you look at the numbers, you see that over the
weekend consumers were frugal and focused, staying within their
budgets and concentrating on the deals and advertised
specials," said Beemer. He cited data from the third
installment of the America's Research Group/UBS Christmas
Survey conducted during the Black Friday weekend that marks the
start of the holiday shopping season.
More consumers are mostly finished with their holiday
shopping this year than a year ago, leaving retailers less room
to squeeze out more sales.
Just over 19 percent of the 809 shoppers surveyed said they
had finished 90 percent or more of their holiday shopping,
compared with 13.6 percent last year. Nearly two-thirds of the
respondents, or 63.1 percent, said they would finish their
shopping in three days or less.
Disciplined shoppers were making lists and sticking to
them, Beemer said. For example, 70.2 percent of consumers
polled said they stayed within their budgets.
The survey showed that 88.1 percent of shoppers turned out
for "early bird" specials on Black Friday and the same number
said they bought items they saw advertised.
Of the consumers who said they planned to shop over the
weekend, 37.0 percent shopped on Friday and another 37.0
percent did not shop at all, the highest numbers in over a
decade, according to the ARG/UBS, which has an error factor of
plus or minus 4.5 percent.
The U.S. economy has been in a recession since December
last year. Job losses are mounting amid a global credit crunch
that has made it more difficult for consumers to buy now and
As a result, demand for everything from cars to restaurant
meals has fallen as worried consumers pay down debt and
squirrel away cash.
None of that bodes well for retailers, who traditionally
move from losses to profits during the holiday shopping frenzy,
and some analysts are calling this the worst sales environment
in almost two decades.
Retailers started slashing prices long before the holidays
-- a strategy that boosts revenue and clears inventories but
Beemer said Wal-Mart Stores Inc (WMT.N) appears to be one
of the industry's few winners.
The company, known for its aggressive discounting, has been
outperforming rivals as the economy has weakened and the trend
appears to be holding true this holiday season.
According to the survey 61.3 percent of consumers said they
shopped at Wal-Mart for gifts, compared with 59.3 percent last
Beemer is expecting tepid sales up until the final weekend
before Christmas, "when retailers get even more desperate."
After studying shoppers for nearly 30 years, he thinks
consumer behavior is changing in ways that could endure for
"Consumers have a new shopping pattern. I don't see things
getting better any time soon. I think this is what we're going
to be into for a long, long time," Beemer said.
(Reporting by Lisa Baertlein; editing by Richard Chang)