Logistics business: NRF calls for 2.3 percent gain in holiday sales

Recent projections from the National Retail Federation indicates that 2010 holiday retail sales will hit $447.1 billion for a 2.3 percent gain over 2009. NRF officials said that while this increase is slightly lower than its ten-year average holiday sales increase of 2.5 percent, it still represents a significant improvement from 2009’s 0.4 percent increase and 2008’s 3.9 percent decline.

By ·

Recent projections from the National Retail Federation indicates that 2010 holiday retail sales will hit $447.1 billion for a 2.3 percent gain over 2009.

NRF officials said that while this increase is slightly lower than its ten-year average holiday sales increase of 2.5 percent, it still represents a significant improvement from 2009’s 0.4 percent increase and 2008’s 3.9 percent decline.

In recent years, retailers have had to deal with excess merchandise and inventory control during the holiday season to limit their exposure to excess merchandise and unplanned markdowns, according to the NRF. And like in recent years the NRF explained that retailers are expected to focus on supply chain efficiencies and inventory control to prepare for these possibilities again.

“We have heard the recession is over officially, but many consumers feel we are still in [one],” said Jack Kleinhenz, Ph.D., NRF Chief Economist, on a media and analyst conference call. “Unemployment remains high and second quarter real GDP is 1.7 percent. We are moving at a very slow, substantially modest pace. It has been disappointing to consumers and policy makers, with a lack of job growth being the biggest shortcoming.”

Looking at previous recessions and recoveries, the conventional wisdom indicates there would be a much more rapid recovery in terms of output and employment at this point in the recovery—which has not happened as much as expected—said Kleinhenz.

The remainder of 2010 appears to be what the NRF economist defined as a sluggish period, with a projected 2.4 percent GDP growth in the fourth quarter year-over-year and 2.6 percent for all of 2010 and 2011.

“I am cautiously optimistic about the holiday season…things look better than they did last year,” he said. “During past recessions consumers used both cash and credit, which helped to supplement personal income. But as we think about what is happening, we find that consumer credit as a percentage of disposal income has been its lowest in a decade. We are seeing changes in the use of credit and the allocation of credit.”

In August, data released by the NRF and the United States Department of Commerce showed 3.6 percent and 3.0 percent gains, respectively. While these numbers are both ahead of the NRF’s holiday forecast, retailers are still faced with the challenge to convince consumers that the recession is over and to buy accordingly.

But given the current economic outlook that is easier said than done, what with unemployment, low consumer confidence and higher personal savings rates, among other things having an ongoing negative effect on the economy.

It has also been apparent in the freight transportation sector, as some volumes for different modes have leveled off to a certain extent compared to a promising first half of the year, when there was a heavy inventory re-build occurring. But even with some volumes weakening, they are still above dismal 2009 levels. One driver for this is due to manufacturers and retailers slowly building up inventories after keeping them deliberately low for months to better match up with low demand levels during the recession.

The relative flattening of retail sales in July and August has brought back a type of freight malaise that had been apparent for several quarters prior to the optimism surrounding the first half of the year, said Charles “Chuck” Clowdis, Managing Director, North America Global Commerce & Transport Advisory Services, at IHS Global Insight . Clowdis added that the best season of the year may have already occurred in 2010, unlike in typical good years when the heaviest freight volumes occur in October. This sentiment is similar to the recent Port Tracker report from the NRF and Hackett Associates, which noted that July may prove to be the busiest month of the year.


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 Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Holiday Sales · NRF · All Topics
Latest Whitepaper
B2B Sellers Prefer a Unified Approach for Ecommerce
A new study from Forrester Consulting, commissioned by NetSuite, found that many midmarket, B2B sellers say their ecommerce solutions have contributed to their growth in sales, new customer acquisitions and improved customer relationships.
Download Today!
From the August 2016 Issue
A growing number of low-cost lift trucks offer new avenues for pairing equipment and applications, but less cautious buyers might find that small up-front costs come at a steep price. Selecting the proper lift truck, lift truck tips 2016, Choosing the right Lift Truck
Megatrends in ocean freight
Ocean Cargo Roundtable: What’s in store for 2017?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...

Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....
Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...