Manufacturers, Importers Worry About Holiday Season

Wednesday, 31 Aug 2011 11:15 AM

By Greg McDonald

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Consumer goods manufacturers and importers are painting a grim picture for the upcoming holiday shopping season, with most expecting sales to be the same or weaker than last year, according to a new survey on retail orders.

The current trends of weak inventory sales and rising prices at this time of year when retailers usually begin placing holiday orders are combining to raise alarms, according to the survey conducted by the international financial services firm Capital Business Credit (CBC).

“Inflation is coming and the era when retailers and manufacturers absorb price increases to protect consumers is over. Our manufacturing clients are telling us that prices for clothing, bedding and other soft goods will rise this holiday season.” said CBC Executive Chairman Andrew Tananbaum.

But he added that retailers are still expected to increase inventories, despite the rise in prices. “Santa may hit a couple of speed bumps, but there will still be a holiday shopping season,” he said.

While 83 percent of CBC clients said they expect prices to rise this holiday season nearly 90 percent said they expect retailers to discount heavily to move merchandise.

Overall, manufacturers and importers are worried; 73 percent of CBC clients, for example, said they expect holiday sales to be about the same or weaker this year than last, and 64 percent reported that their retail orders are about the same or less than they were at this time last year.

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