Economic turbulence, political uncertainty to dampen holiday sales, says report

Oct 05, 2011 By Marc Ransford

 A troubled economy and political infighting will darken the upcoming holiday retail season as consumer spending will barely rise over 2010 levels, says a new report from Ball State University.

The 2011 Holiday Retail Sales Forecast anticipates that overall retail sales will increase by 0.8 percent over last year. Sales during the last few months of the year have rebounded since the depths of the Great Recession of 2007-09 but still are not close to the prerecession heights.

"A general angst over the future of the economy will doubtless hobble retailers this season," said report author Michael Hicks, director of Ball State's Center for Business and Economic Research (CBER), the research division of the Miller College of Business. "In a way, the fear of big economic turbulence in Europe, because of Greece, combines with the political uncertainty here in the U.S. to dampen the spending spirits at holidays."

When comparing sales for the upcoming retail with those from last year, Hicks' analysis forecasts increases in several categories, including clothing, up 4.2  percent; consumer electronics, 3.3 percent; department stores, 2.3 percent; furniture, 2 percent; restaurant, bar and pub sales, 1.9 percent; and items at club stores, 0.8 percent.

Sectors seeing declines will be used good sales, down 14.1 percent; autos, 7.4 percent, and jewelry, 1.2 percent.

Hicks said several other factors are contributing to the poor environment for retailers, including low consumer confidence, declining personal income, steadily growing household savings rates and high gasoline prices.

"One year ago, optimism about a stronger recovery was growing," he said. "As this holiday season approaches, few analysts predict a robust recovery across the country. These factors dampen holiday buying and suggest retailers will struggle significantly over the holiday season.

"Further exacerbating the challenges to business will likely be a rush to discount over the holiday season, which stretches 30 days from Black Friday through Christmas Eve. Much of the increased is likely to result from deep discounting, especially among big box stores."

Explore further: 3 Qs: Economist makes the case for new quasi-experiments as a way of studying environmental issues

Provided by Ball State University

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Retail sector improves as consumers open their wallets

Nov 10, 2010

Retail sales for the upcoming holiday season should echo the nation's struggling economic recovery as consumers increase buying by 2.3 percent over last year, says a new report from Ball State University.

Forrester projects rise in online holiday sales

Nov 02, 2009

(AP) -- Forrester Research Inc. is projecting an 8 percent increase to $44.7 billion in online holiday sales compared with a year ago as bargain hunters turn to the Web for deals.

Recommended for you

Which foods may cost you more due to Calif. drought

Apr 17, 2014

With California experiencing one of its worst droughts on record, grocery shoppers across the country can expect to see a short supply of certain fruits and vegetables in stores, and to pay higher prices ...

Performance measures for CEOs vary greatly, study finds

Apr 16, 2014

As companies file their annual proxy statements with the U.S. Securities and Exchange Commission (SEC) this spring, a new study by Rice University and Cornell University shows just how S&P 500 companies have ...

Investment helps keep transport up to speed

Apr 16, 2014

Greater investment in education and training for employees will be required to meet the future needs of the transport and logistics industry, according to recent reports by Monash University researchers.

User comments : 0

More news stories

Study finds law dramatically curbing need for speed

Almost seven years have passed since Ontario's street-racing legislation hit the books and, according to one Western researcher, it has succeeded in putting the brakes on the number of convictions and, more importantly, injuries ...

Newlyweds, be careful what you wish for

A statistical analysis of the gift "fulfillments" at several hundred online wedding gift registries suggests that wedding guests are caught between a rock and a hard place when it comes to buying an appropriate gift for the ...

LADEE mission ends with planned lunar impact

(Phys.org) —Ground controllers at NASA's Ames Research Center in Moffett Field, Calif., have confirmed that NASA's Lunar Atmosphere and Dust Environment Explorer (LADEE) spacecraft impacted the surface ...