Fourth-quarter retail sales for the upcoming holiday period are predicted for growth at 2.5 percent compared with the 0.5 percent increase in 2009, according to Kantar Retail.
In particular, Kantar forecasts sales at apparel and accessories channels to grow slightly (with specialty stores leading the gains) in Q4 versus the decline seen a year ago. Mass retailers (including discount department stores, supercenters, warehouse clubs and small-format value stores) are predicted to grow about the same as in 2009. Non-store and online retailers are expected to post strong growth this holiday season, a category that has seen double-digit growth recently due to a high demand for e-book readers, e-books, smart phones and other consumer electronics.
"Prices and uncertainty will weigh heavily on the holiday outlook," says Frank Badillo, senior economist for Kantar Retail. "Ongoing price competition among retailers, led by Walmart, is more likely to take a toll on sales gains than boost unit demand among shoppers who remain value conscious."
Meanwhile, shoppers remain cautious and continue to hold onto deal-seeking tactics from the recession, according to Kantar's ShopperScape survey.
"Getting shoppers to loosen the clench on their wallets will largely depend on how well retailers align promotions to when and where key shopper groups are shopping this holiday season," says Mandy Putnam, vice president with Kantar Retail and director of ShopperScape.