NEW YORK: In seasonal ritual that dates back to the arrival of the Pilgrim Fathers, the US retail industry is again predicting dire sales for the holiday season and the cry 'wolf!' is heard loud in the land. This year, however, the prophets of doom are probably right.
A poll of chief marketing officers at one hundred retail groups carried out by tax, financial advisory and consulting services specialist BDO Seidman reports downbeat expectations.
The morose marketers expect same-store sales in November and December to fall an average of 2.7% from year-ago levels. In the hope of bucking the trend, 88% of respondents said they intend to offer more discounts and promotional deals than last year.
Warns BDOS partner Doug Hart: "Retail executives are expecting this to be the toughest holiday season in more than fifteen years." He added that apart from discounters, which typically do well in an economic downturn, pessimism is "pretty broad across all the categories."
The survey, conducted September 22 through October 17, questioned executives at retail companies with sales of more than $100 million. Of the executives interviewed …
- Thirty-nine percent said they expect same-store sales to decline this holiday season;
- 41% expect flat sales and 20% said they expect sales to rise;
- By contrast, last year a mere 5% of chief marketing officers said they expected sales to fall, and 41% said they expected to ring up higher sales.
- More ominously yet, 65% of respondents said they don't expect to see a meaningful economic turnaround until the third quarter of 2009 at the earliest.
Consumers are in a similarly downbeat mood.
In a separate survey of 1,000 US consumers earlier this month, consultantancy AlixPartners found that 64% plan to spend less on gifts this holiday season; and 46% don't expect the economic slowdown to end for at least three years.
Data sourced from Wall Street Journal Online; additional content by WARC staff