Bloomberg News

U.S. Holiday Sales Expected to Rise on More Store Visits

September 12, 2012

Holiday retail sales in the U.S. may rise 3.3 percent as more confident consumers increase their trips to the mall, according to researcher ShopperTrak.

Store visits during the busiest shopping period of the year are expected to rise 2.8 percent after declining last November and December, according to an e-mailed statement from the Chicago-based firm that tracks so-called foot traffic in thousands of U.S. stores. Sales gained 3.7 percent during the same period in 2011, the company said.

The projected increase in store traffic would be the first gain since 2007 and offers retailers a chance to drive more impulse purchases and convert shoppers who aren’t regular customers into buyers, Bill Martin, chief executive officer of ShopperTrak, said.

“Consumers are feeling more comfortable, and now they are taking their time and going to a few more stores,” Martin said in an interview yesterday. Retailers offering quality in-store experiences and service should have an opportunity to boost sales, he said.

The forecast comes after sales during the back-to-school shopping season rose more than expected. Excluding drugstores, same-store sales in August advanced 5.9 percent, topping estimates for a 4.2 percent increase, according to Swampscott, Massachusetts-based Retail Metrics. Foot traffic rose 11 percent last month, according to ShopperTrak.

Calendar Shift Helps

The holiday shopping season, which accounts for about 20 percent of annual retail activity, will be helped by a shift in the calendar, ShopperTrak said. There is a full weekend of shopping before Christmas, which falls on a Tuesday compared with Sunday last year. Hanukkah beginning on Dec. 8 after starting on Dec. 20 last year will also boost sales.

While consumer confidence has been volatile from month to month, it’s been on an upward trend this year, which will help holiday sales, Martin said. Foot traffic has gained since Presidents’ Day in February, according to ShopperTrak.

Changes in gas prices, which correlate directly to how many store visits people make, won’t have a profound effect on holiday shopping because they’ve stayed in the same range for a long period of time, Martin said.

Last holiday shopping season retailers used deep discounts earlier than ever to lure shoppers. That pulled more purchases into November leading to robust sales. Those early purchases made December more promotional than previous years as stores fought for customers, leading chains such as Target Corp. (TGT:US), J.C. Penney Co. and American Eagle Outfitters Inc. (AEO:US) to lower their profit forecasts.

Such promotions in late October and early November will be more difficult to execute with the public focused on the presidential election, Martin said. The election would also make advertising more expensive in some areas, which could encourage retailers to hold off until closer to Thanksgiving, he said.

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


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Companies Mentioned

  • TGT
    (Target Corp)
    • $71.51 USD
    • 0.32
    • 0.45%
  • AEO
    (American Eagle Outfitters Inc)
    • $13.68 USD
    • -0.06
    • -0.44%
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