News
Experts Predict More Retail Sales, Fewer In-store Shoppers This Holiday Season
Industr y
Despite the struggling economy and high unemployment rates,
consumers plan to stuff their holiday stockings a little fuller this year.
According to Shopper Trak – the world’s largest provider of retail foot
traffic counting, managed services and business analytics – national
retail sales, when compared to the same period last year, will rise
3.0 percent during November and December, while foot traffic will
decrease 2. 2 percent.
Holiday sales and traffic historically account for approximately 20
percent of annual retail activity. With U.S. Gross Domestic Product
(GDP) growth disappointing in the first half of 2011, the forecast indicating holiday retail sales and traffic is a key marker of the nation’s
economic health. Shopper Trak’s 3.0 percent holiday sales increase
prediction follows 19 consecutive months of year-over-year U.S. retail
sales growth. The expected increase is moderate compared to the 2010
holiday season’s 4. 1 percent sales increase over 2009.
Conversely to sales, ShopperTrak expects foot traffic to continue
decreasing through the end of 2011, due to high unemployment rates
and gas prices seeing a 33 percent increase this season over last. So far
this year, shoppers have visited an average of 3. 10 stores per shopping
trip, down from 3. 19 per shopping trip in 2010 and far less than the four
to five stores visited in early 2008, prior to the recession. Converting
fewer numbers of shoppers to buyers has never been more important
for retailers who understand this critical retail health indicator.
“The persistently high unemployment and fuel rates along with
consumers’ conservative purchasing attitudes will affect spending
this holiday season more than in recent years,” said Shopper Trak
co-founder Bill Martin. “Every shopper in a store will be more valuable
than last year, and retail stores should be ready to convert their
holiday shoppers into sales.”
According to Shopper Trak, the historically popular Apparel and Accessories category’s sales will increase 2. 7 percent while its foot traffic
will decline 1. 1 percent this holiday season compared to 2010. While
consumers are expected to buy a bit more this holiday season than
last, they are increasingly sensitive to value. Lower-end apparel and
accessories specialty stores may be pressured to reduce prices to
compete with discount chains. Higher-end stores, however, may have
an advantage this season as shoppers seek quality purchases offering
perceived value and longevity of use.
Shopper Trak expects the Electronics & Appliances sector’s sales to
increase slightly by 1. 2 percent over last year, while foot traffic will
drop 4. 9 percent. The category’s moderate outlook can be attributed
to the limited number of blockbuster electronic products being introduced this season. Value-conscious consumers are also increasingly
using the Internet to stretch their dollars by shopping at online outlets
with potential for deep discounts or researching premium-priced, large
purchases. As a result, when consumers do walk into stores, they have
a purchasing strategy and are less likely to browse. This will account
for significant foot traffic losses this holiday season.
“As the economy continues to struggle, tracking daily foot traffic and
understanding store traffic patterns is more important than ever,” added
Bill Martin. “Retailers who pay close attention to their browser-to-buyer
conversion rates and adjust their product offerings, store layouts and
staff scheduling to improve those rates will be the most successful
this year.”
ShopperTrak
measures foot
traffic in more
than 25,000
stores in the
United States
and analyzes the
data in a proprietary econometric
model to create
its National Retail
Sales Estimate™
(NRSE) of general
merchandise,
apparel and
accessories,
furniture and
other sales
(GAFO). Its estimate precedes the federal government’s official reports
by several weeks and, since January 2005, it has been accurate to plus
or minus 3 percent. Forecasted numbers may improve with any changes in the nation’s unemployment rate, consumer sentiment or reduced
gasoline prices. For more information, visit
www.shoppertrak.com.
