Orlando, FL, November 16--Consumers are expected to spend with zeal this holiday -- topping last year's comeback season by an estimated 3 percent to 6 percent and sending the two-month holiday tally to a staggering $220 billion, according to OrlandoSentinel.com.
Even rising fuel prices and the lukewarm jobs market can't dim retailers' confidence.
Forecasters say Americans are in the mood to shop and are ready to throw cash at pricey electronics, luxury apparel, sporting goods and jewelry.
These predictions are bolstered by the industry's strong performance in the first half of the year, flourishing sales at some of the nation's top luxury retailers and consumers' willingness to shop early.
Take October same-store sales: Neiman Marcus, Nordstrom and Abercrombie & Fitch posted double-digit gains, while sales at a handful of other retailers, including Target and Costco, rose by more than 5 percent.
"It's finally OK to splurge," said Jay McIntosh, director of retail and consumer products for Ernst & Young's America division. "Consumers got a taste of it last year, spending more after cutting back the year before. That pent-up demand is still driving sales."
But naysayers warn that several wild-card factors could mean the difference between a great shopping season and an average one.
Like last year, retailers have kept inventories lean, hoping to avoid profit-eating discounts that plagued 2002, when holiday sales rose a dismal 1.2 percent. The absence of huge bargains could dissuade some shoppers, especially those who planned to take advantage of discounts to load up on gifts for themselves.
Lower-income shoppers, struggling to make ends meet amid rising fuel and utility prices, also could stymie sales growth.
"If consumers are paying more to drive their cars and heat their homes, they have less discretionary money," said Ellen Tolley, spokeswoman for the National Retail Federation.
Still, the group expects this year's sales -- the average household plans to spend $702.03, a 4.5 percent increase over last year -- to be driven by middle-income to higher-income consumers, two groups affected less by climbing energy prices.
That's not going to mean much for Wal-Mart Stores Inc., the nation's No. 1 retailer.
The chain stands to lose the most ground if lower-income shoppers, the company's target customers, decide to scale back. Earlier this month, the Bentonville, Ark.-based chain posted just a 2.8 percent increase in October sales, disappointing analysts who had expected a gain of 3 percent.
Experts say that suggests lower-income shoppers already are worried. And it puts the fate of this holiday's shop-a-thon squarely on the shoulders of luxury retailers and specialty shops.
According to the International Council of Shopping Centers, most Americans rate their financial situation as the strongest in more than two years. It helps that the traditional gift-buying period between Thanksgiving and Christmas is 29 days long -- two days longer than last year.
