Black Friday: Holiday spending predictions call for a happy one
Don't break out the champagne yet, but top retail analysts are forecasting a fourth-quarter sales boom, perhaps also signaling an upturn in the economy.
The National Retail Federation (NRF) predicts sales growth of 2.3% for November and December starting on Black Friday, the day after Thanksgiving, when a retailer's bottom line hopefully turns from red to black. An even more optimistic forecast was issued by Kantar Retail, a major retail consulting firm, which predicted a 2.5% increase in fourth-quarter sales.
Kantar's forecast is especially significant because the firm is noted for its conservative predictions. Real sales often surpass Kantar's restrained forecasts, although their 2008 prediction fell short of the target as the economy slumped badly that year.
With the recession squeezing budgets this year, an exceptionally large number of cost-conscious buyers are expected to sweep through retail outlets snapping up the best deals on Black Friday.
Some analysts say Black Friday will be the busiest shopping day of the year, as it often has been in recent years past.
There's good news for consumers, too, because the Black Friday bargains will be very attractive. High on consumer shopping lists will be steeply discounted items that have racked up big sales in recent years: toys, electronic gadgets, flat-panel television sets, computers and computer games, laptops and GPS devices, say analysts.
"If consumers have been waiting for the best deals possible, their wait is over," said Phil Rist, Executive Vice President of Strategic Initiatives at BIG Research in an NRF statement to the media.
"Even though consumers will be watchful of their spending this year, shoppers may find bargains too good to pass up and will treat themselves to something they've had their eye on for months," said Rist.
By the time consumers have finished their holiday buying, they'll have spent a hefty $447.1 billion, according to the NRF forecast.
An upward trend in sales was kicked off in September with a spike in retail sales over last year. Upscale department stores were the big winners. But despite the brighter economic outlook of analysts, retailers were not yet counting anticipated profits.
"Though the retail industry is on stronger footing than last year, companies are closely watching key economic indicators like employment and consumer confidence before getting too optimistic," said NFR President and CEO Matthew Shay.
Although Shay says retailers are nervous about consumer spending, the International Council of Shopping Centers, which monitors retail sales, predicts an even rosier picture for holiday sales than other analysts, forecasting an increase of from 3% to 3.5% for stores open a year or longer.
Forecasts from the NRF and ICSC, however, are not equivalent because the NRF percentage tallies total sales and the ISSC percentage tabulates monthly figures.
If Black Friday sales meet or exceed forecasts, it could mean the economy is bouncing back. If sales figures fail to fly, however, there may be more hard times ahead.