Experts Predict More Retail Sales, but Fewer In-Store Shoppers This Holiday Season - Retail sales will grow despite struggling economy and wary consumers -
CHICAGO, Sept. 21, 2011 /PRNewswire/ -- Despite the struggling economy and high unemployment rates, consumers plan to stuff their holiday stockings a little fuller this year.
According to ShopperTrak — 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. ShopperTrak'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 ShopperTrak 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."
Apparel & Accessories Sector Up; Electronics & Appliance Lag
According to ShopperTrak, 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.
ShopperTrak expects the Electronics & Appliance 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.
ShopperTrak provides cutting-edge retail intelligence solutions enabling retail companies to count and benchmark their retail foot traffic at the national, regional and local levels to better understand trends and determine the impact of store and staff performance on company revenues. With more than 40,000 units installed in the world's best known retail outlets and malls and more than 15 years of retail expertise, ShopperTrak is the industry's authority for information and analysis of the movement of shoppers in retail environments. ShopperTrak offers a managed service to provide the most accurate retail foot traffic counting service available. The company's solutions provide a proven means for retailers to gauge labor efficiencies, advertising and marketing efforts, store design and remodeling programs, merchandise changes, associate training programs, and other budget-intensive strategic initiatives. ShopperTrak is a privately held entity headquartered in Chicago, Ill. For more information, visit www.shoppertrak.com.
About the National Retail Sales Estimate (NRSE)
Developed by ShopperTrak, the National Retail Sales Estimate (NRSE) provides a nationwide benchmark of GAFO retail sales. NRSE is derived from the U.S. Commerce Department's GAFO (general merchandise, apparel, furniture, sporting goods, electronics, hobby, books and other related store sales) statistic, as well as ShopperTrak's proprietary industry intelligence on shopper foot traffic and sales. NRSE provides retailers, investors and policy makers the most accurate and timely information on consumer sales trends available today.
The data contained within this news release is the property of ShopperTrak Corporation and may be reprinted, published or broadcast, provided proper credit is given to the National Retail Sales Estimate (NRSE), Business Analytics Traffic and ShopperTrak Corporation as the supplier of the information. For more information, please visit www.shoppertrak.com.