On the heels of a holiday season that outperformed most analysts’ expectations, holiday retail sales for 2011 are expected to increase 2.8 percent to $465.6 billion, according to the National Retail Federation. While that growth is far lower than the 5.2 percent increase retailers experienced last year, it is slightly higher than the ten-year average holiday sales increase of 2.6 percent.
“Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season,” said Matthew Shay, NRF president and CEO. “While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009.”
Though several economic indicators paint a solid picture for the holiday season–including 14 consecutive months of retail sales growth and a substantial reduction in household debt–continued consumer uncertainty over the stock market, higher gas and food prices, fiscal policy and sputtering job growth will impact spending this holiday season.
The retail trade association also estimates that retailers will hire 480,000-500,000 seasonal workers, which is comparable to the 495,000 seasonal employees they hired last year. This is in addition to 100,000 people retailers have hired since August.