Nothing concrete can be said about the outcome of the holiday
season at this present juncture. It is a wait-and-watch game to
find out if retailers will be rewarded, or if they fall weak
against the negative consumer sentiment largely due to the
looming "Fiscal Cliff". However, the latest data unveiled by
ShopperTrak hints at a slower growth forecast than previously
The Chicago-based retail analysis firm now projects holiday
sales for November and December period to rise 2.5%, down from
3.3% increase previously forecasted in September 2012. The
current estimate also fares unfavorably with 3.7% growth achieved
in the prior-year holiday season.
The retail foot traffic data provider, ShopperTrak trimmed its
holiday sales forecasts blaming the huge discounts offered by
retailers to entice consumers, and the adverse impact of
Hurricane Sandy that derailed November comparable-store
However, on the positive front, ShopperTrak reiterated that
foot traffic in this holiday season will rise 2.8% compared with
2011, which experienced a 2.2% decline in foot traffic from 2010.
If the estimate is true, this will be the first increase in foot
traffic during the holiday season since 2008, when the economy
slumped to recession.
ShopperTrak also revealed that foot traffic jumped 15.1% and
retail sales surged 16.4% for the week ending December 15, when
compared with the previous week. However, comparing with the
prior-year period, foot traffic and retail sales dropped 4.4% and
4.3%, respectively, for the week ending December 15. ShopperTrak
also suggested that the week ending on December 22 may witness
the highest sales volume in 2012.
Thus, we need to wait to find out how the total December sales
turn up; i.e., whether it fares better than November or succumb
to the current economic upheaval. According to the data released
by the U.S. Department of Commerce, total retail and food
services sales jumped 0.3% in November, rebounding from a decline
of an equivalent percentage in October. (Also Read:
Will December Mirror November Sales?
Analysts are anticipating sluggish economic growth as
companies seem reluctant to make any prudent investments until a
negotiation regarding the Fiscal Cliff issue is reached between
the Republicans and Democrats before the onset of 2013. The
austerity measures and fear of impending tax hike are creating
some panic among consumers. In recent days, the Street's mood
doesn't seem much optimistic as investors remain apprehensive
about the failure on the part of policy makers to reach a
The Dow Jones Industrial Average (DJI) shed 0.7% to close at
13,251.97 on December 19. The S&P 500 dropped 0.8% to end the
day at 1,435.81, whereas the tech-laden Nasdaq Composite Index
dropped 0.3% to close at 3,044.36.
Sensing the pulse, retailers such as
Costco Wholesale Corporation
Limited Brands Inc.
) and others will be actively making efforts to win the hearts of
bargain hunters. Despite the lingering economic concerns, we hope
the arrival of Christmas will guide demand higher and ease
COSTCO WHOLE CP (COST): Free Stock Analysis
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KOHLS CORP (KSS): Free Stock Analysis Report
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