NRF bumps up its holiday retail sales forecast

Following an early October prediction of 2011 holiday sales rising 2.8 percent to $465.6 billion, the NRF is now calling for 2011 to be up 3.8 percent to $469.1 billion. Holiday sales—as defined by the NRF—are sales in the months of November and December.

By ·

With an optimistic eye on retail activity, the National Retail Federation (NRF) said today it has raised its forecast for holiday shopping season.

Following an early October prediction of 2011 holiday sales rising 2.8 percent to $465.6 billion, the NRF is now calling for 2011 to be up 3.8 percent to $469.1 billion. Holiday sales—as defined by the NRF—are sales in the months of November and December.

Both of these estimates pale when compared to the 5.2 percent annual gain in holiday retail sales from 2009 to 2010, even though the 2009 comparison year was significantly lower than 2010.

Earlier this week, the United States Department of Commerce reported that November retail sales were up for the sixth straight month at $399.3 billion, up 0.2 percent compared to October and up 6.7 percent annually. And the NRF reported that November retail sales (which exclude automobiles, gas stations, and restaurants) rose 0.09 percent from October and 4.5 annually.

“After strong sales reports in October and November, along with a successful Black Friday weekend, retailers are cautiously optimistic that this season will turn out better than initially expected, bringing added stability to our recovering economy at a time when America needs it most,” NRF President and CEO Matthew Shay said in a statement. “However, a number of factors, including the debt crisis in Europe and continued political wrangling in Washington, could impact consumer spending this holiday season and into 2012.”

Even with the NRF upping its forecast for holiday retail sales, it does not suggest that these increase retails sales numbers are a permanent sign of things to come. Running counter to the optimism are the realities that unemployment remains high, housing is sluggish, and consumers are still being cautious when making purchasing decisions to a large degree.

This was made clear by T. Michael Glenn, FedEx executive vice president, market development and corporate communications, said on an earning conference call earlier today.

Glenn said FedEx expects economic growth to continue at a “moderate pace as inventory destocking has been a headwind for GDP and shipping demand in recent months. The combination of record-low inventories relative to sales in the distribution sector and continued growth in demand should lead to restocking in the coming months. He added that while consumer confidence remains at record-low levels, there has been improvement recently, with November’s consumer confidence level hitting its highest point since July and its biggest monthly gain since April 2003.

And Charles W. “Chuck” Clowdis , Jr., Managing Director-Transportation Advisory Services, at IHS Global Insight, told LM said it may be too early to tell in terms of gauging the true impact of NRF’s new forecast.

“We can hope that these optimistic forecasts are correct and consumer Holiday spending will continue to rise,” said Clowdis. “Pent-up demand just may be loosening somewhat as consumers are ready to indulge themselves with new products and goods; something many have not done in the past several seasons. It will be interesting to see how much spending is done with ‘plastic” v cash. ‘”

Another potentially positive sign for holiday retail sales came from this week’s Port Tracker report by the NRF and Hackett and Associates, which noted that shifts in inventory management by retailers appear to have made an impact on import cargo volumes at major United States-based container ports.

The report is calling for December imports to be up slightly on an annual basis, coming after several months where retailers had reduced their imports from last year and is a positive sign by comparison as it suggests retailers maintain consumer confidence is increasing.

In an interview with LM, Ben Hackett, president of Hackett Associates, explained that there are clear signs that the U.S. economy is picking up, with things currently not as bad as originally expected. Among the metrics showing improvement are consumer confidence, the Institute for Supply Management’s PMI, and industrial production, among others.

“Consumers have continued to spend after Thanksgiving weekend into December,” said Hackett.

And along with consumer spending showing signs of life, cautious inventory planning by retailers is also impacting freight flows and volumes, too, said Hackett. He said this was evident, with inventory being managed at or near critical levels, with a little increase in October. But especially since Thanksgiving weekend, inventory levels are back to fairly low levels, coupled with some re-stocking occurring by retailers.

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Modern Materials Handling Magazine!

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Article Topics

· All Topics
Latest Whitepaper
Hydrogen, the Future of Materials Handling
Large, successful organizations are integrating hydrogen fuel cell technology into their lift truck fleets and benefiting from lower operational costs, reduced emissions and improved reliability.
Download Today!
From the October 2016 Issue
Brownells’ new Iowa distribution center has taken touches—and miles—out of the order fulfillment process and increased throughput with near 100% accuracy.
System Report: Brownells new DC is flexible and responsive
Pallet Usage Report: Pallets Remain Critical in the Modern-Day Warehouse
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Pallets: Supporting Product, Processes and the Enterprise
The smallest leak in performance or cost can bring a lean, nimble and speedy supply chain to a halt. During this 30-minute webcast we'll examine how Modern's readers use pallets to keep the wheels turning as they maneuver a road filled with sharp edges and potholes.
Register Today!
Brownells: Designing for Efficiency and Growth
Brownells’ new Iowa distribution center has taken touches—and miles—out of the order...
Industry celebrates National Manufacturing Day
Fourth annual Manufacturing Day is a grassroots effort by U.S. manufacturers to improve the public...

American Eagle Outfitters’ omni-channel journey
The fashion retailer has used warehouse execution software and automation to create a true...
The data-driven lift truck
Now that manufacturers and distributors are using the data from their automated systems to drive...