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Holiday Retail Forecast Revised Upward


Robust sales of electronics are reviving the retail market this holiday season as US consumers rush to find bargains, especially on flat-panel TV sets,according to America's Research Group. ARG has accordingly revised its retail holiday forecast upward to -1.2% growth, up from the -2.9% it had forecast in early November.

High Demand for Electronics

For the first time in 25 years, holiday spending on electronics is virtually tied with spending on toys: 30.0% of US consumers say the gift item they are buying most is electronics, while 30.8% say toys. Last year, only 23.7% of consumers cited electronics, while 33.8% cited toys.

"Electronics sales, especially flat-panel TV sets, are flying out the door this Christmas season, "said C. Britt Beemer, CEO and founder of ARG. "When flat panel TV sets hit the magic $499 price point, sales go up like a rocket. Twenty years ago, the same thing happened with VCRs when they hit the $249 price point."

Consumers are also buying apparel this year:

  • 17.1% say they are buying children's clothing this year.
  • 37.6% say they are buying winter apparel for themselves, compared with 23.0% in 2008.
  • 68.6% say they are buying winter apparel as gifts, compared with 43.1% last year.

In contrast, the sales of gift cards are weak this season: 49% of consumers have bought them so far, down from 53% last year. Sales of videogames slowed to 15.6% of purchases.

Online shopping is down this year to 34.3% of purchases, from 41.3% last year.

Consumers Hold Out for Discounts

Overall, consumers feel financially stressed this year and 26.5% plan to complete their shopping just before the holiday, when they expect to take advantage of heavy discounts, according to an earlier survey.  Of those consumers who have not shopped, 95.1% say they will wait until December 24 in an effort to find sale items.

Overall Retail Spending Edges Up

Separate data provided a boost for retailers as US retail spending reached $352.2 billion in November 2009, an increase of 1.3% over the previous month, and a 1.9% increase over November 2008, according to the US Department of Commerce.

The growth was led by sales in automobiles (1.6%) and electronics (2.8%), according to the government data, which provided a positive economic sign amid the critical holiday shopping period. 

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