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

October 5, 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: Web shopping only holiday retailing bright spot, Purdue expert says

Related Stories

Forrester projects rise in online holiday sales

November 2, 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.

Retail sector improves as consumers open their wallets

November 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.

Recommended for you

The culinary habits of the Stonehenge builders

October 13, 2015

A team of archaeologists at the University of York have revealed new insights into cuisine choices and eating habits at Durrington Walls – a Late Neolithic monument and settlement site thought to be the residence for the ...

Ancient genome from Africa sequenced for the first time

October 8, 2015

The first ancient human genome from Africa to be sequenced has revealed that a wave of migration back into Africa from Western Eurasia around 3,000 years ago was up to twice as significant as previously thought, and affected ...

Mexican site yields new details of sacrifice of Spaniards

October 9, 2015

It was one of the worst defeats in one of history's most dramatic conquests: Only a year after Hernan Cortes landed in Mexico, hundreds of people in a Spanish-led convey were captured, sacrificed and apparently eaten.

From a very old skeleton, new insights on ancient migrations

October 9, 2015

Three years ago, a group of researchers found a cave in Ethiopia with a secret: it held the 4,500-year-old remains of a man, with his head resting on a rock pillow, his hands folded under his face, and stone flake tools surrounding ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.