NEW YORK–The holiday retail predictions are starting to trickle in—and they’re not rosy, particularly for home merchants.
Holiday sales this year will be the weakest in 17 years, according to TNS Retail Forward. The firm forecasts 1.5 percent growth for the fourth quarter, the lowest amount since 1.2 percent in 1991.
And home retailers will see sales decline this holiday by 1.0 percent, the market research firm said.
Furniture and home furnishings stores will experience the biggest deterioration, echoing the lagging impact of the housing market on demand.
“The benefit from a let-up in gasoline prices will be overwhelmed by the impact of rising unemployment, tighter credit and other hardships on households,” said Frank Badillo, senior economist for TNS Retail Forward, in a statement. “And, unfortunately, the trends in economic conditions offer no sign of an impending recovery.”
Deloitte’s forecast is somewhat more optimistic, but still predicts that retail sales gains will be lower than in 2007.
The company expects retail sales to rise 2.5 to 3.0 percent for the November to January period, less than last year’s 3.4 percent.
Combined with Wall Street’s difficulties, retailers should expect only a modest rise in holiday sales this season, according to Deloitte.
“High energy and food prices are making a dent in consumers’ wallets, and the dramatic drop in home mortgage refinancings has dried up a substantial source of discretionary funds,” said Carl Steidtmann, chief economist with Deloitte Research Services LP, in a statement.