Tags: holiday | sales | worse

Holiday Sales May Be Worse Than Thought: Researcher

Monday, 01 Dec 2008 08:04 AM

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CHICAGO -- Holiday sales are likely to be worse than thought based on surveys taken over the Black Friday weekend, according to America's Research Group.

The group's founder and CEO, Britt Beemer, had already forecast 2008 would see the first decline in sales in almost a quarter century of holiday spending surveys as the U.S. economy shrinks.

Beemer told Reuters on Sunday he expected to lower his forecast this week after seeing how consumers responded to his group's survey during the three days following Thanksgiving, the traditional kickoff to the holiday shopping season.

Beemer will release his new forecast and full survey results later this week.

But questions asked exclusively for Reuters gave a hint as to why he planned to lower his forecast further from a previous view of a 1 percent decline in holiday sales.

Of the 809 people surveyed, 38 percent said they spent less over the weekend this year than in 2007 and 18.9 percent said they spent more. The remainder said they spent about the same.

"There's no way retail sales could be up when twice as many consumers spent less than more," Beemer said.

Also, while retailers aggressively cut prices to lure consumers into the stores, 30.2 percent of those surveyed by America's Research Group said they thought sales and discounts were not as good as last year, while only 20.5 percent said they were better. The rest said the deals were about the same.

"This is the first time that 'not as good' beat 'better,' " in 23 years of surveys, Beemer said.

His findings differed from the National Retail Federation, whose survey showed U.S. consumers spent on average 7.2 percent more in the four days from Thanksgiving to Sunday.

The NRF said consumers may have completed more of their holiday shopping over the weekend than in previous years, and predicted that growth would drop off in the weeks to come.

According to America's Research Group, 43.4 percent of shoppers surveyed said their family's financial situation was not as good as last year, while 14.7 percent said their financial situation was better,

As to staffing, 65 percent said their were enough sales people in stores on "Black Friday" and 34 percent said stores were understaffed. Last year about 25 percent of people said stores were understaffed.

Retailers trying to maintain razor-thin margins in a declining economy and what some analysts say is the worst retail environment in almost two decades have been cutting costs where they can, including keeping hiring lean during the holiday season.

Among other results, 89.6 percent of respondents said they could find the advertised sales items they intended to buy, compared with 92 percent in 2007.

And when asked what item they would get rid of if they needed to cut costs in their household budget, 48.3 percent said they would eliminate premium cable channels, 20.4 percent said they would cut their cell phone, 13.8 percent said they would get rid of Internet broadband and 12.9 percent said they would eliminate a fixed telephone line.

The survey had an error factor of plus or minus 4.5 percent.

Also see here for Reuters holiday coverage and blogs.reuters.com/shop-talk/ for Shop Talk - Reuters' retail and consumer blog.

© Thomson Reuters 2008 All rights reserved

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