Not So Merry Christmas Most Probable For Retailers

The war between retailers has already started, and it looks like no one is going to win or lose.  One side of the war is narrowing industry market, skyrocketing property costs and recurrent petrol prices that reached an eleven-year low. The other side is unstable stocks, decelerating global progress and buyers who are spending more on rental fees and purchases based on experience.

According to sales forecasts, the outcome for this is a neutral signal for retailers. Businessmen should not panic, but they shouldn’t expect robust sales either.

A model established by AlixPartners on 2012 was used to find out that there was between 66.2-66.4% yearly deals happen though August. From this result, it was projected that there will be an increase of 2.8-3.4 percent on November and December. It is low compared to 4.4 % rise from the previous year. Both of the growth rates do not include cars, restaurants and petrol stations.

Deloitte’s holiday projection verdicts 3.5- 4% rise on sales starting from November until January. The figure does not include vehicles and petrol. The figure is also low compared to last year’s 5.2% increase.

According to Daniel Bachman, head economist of Deloitte, the gains of holiday purchases might be lower than the previous year because of the lasting impact of poor income progress during the year’s first 3 months. Though the economy is generally doing well, there are concerns affecting consumers regardless of the income. Rod Sides, head of retail and product allocation of Deloitte, said that the family salary usually affects spending more than market instability.

AlixPartners however stressed that consumers with higher incomes, have been doing substantial retail purchases during the last few years. As the market shakes, the wealthy could restrict their purchases. This prediction is supported by data reported by American Affluence Research Center.

Based on the research of AARC, Christmas gift shopping by 12 million U.S. families with net worth not lower than $1 million is projected to achieve a mean of $2,749 for 2015. Even if the value means 4% increase, it is lower than the previous year’s data of almost 6% rise in spending. The wealthy families are spending more in stores like bed shops Perth up to four times more than an average family in the U.S.