Sales Season Looms as Less Bad than 2008

An unemployment rate hovering around the 10 percent mark is certain to keep sales of non-essential items as HD products down.
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How CE retailers and HD-centric manufacturers view the upcoming, all-important holiday sales season that begins in earnest at Thanksgiving (in America, at least), could largely depend on the proverbial glass half-full/half-empty approach.

On the positive side, most forecasters are predicting that sales of CE items including HD panels, Blu-ray players, and surround-sound systems will not match the dismal environment that greeted retailers last season. In that sense, things are looking up.

On the half-empty side, it looks like it will still be a below-normal CE sales period (depending on what may count as the new “normal” these days) and sales likely will again decline, although not as much as a year ago. Despite some short-term resurgence in the stock market, an unemployment rate hovering around the 10 percent mark is certain to keep sales of non-essential items as HD products down (especially since that 9.8 percent without jobs does not include frustrated unemployed workers who have stopped looking, and former full-time workers who are now working part-time involuntarily).

The CE sales season also could be compounded (in a sort of chicken-and-egg mentality) by major CE retailers such as Best Buy and Target who may cut back on their advertising budgets — and that would be bad news for retailers looking for help in getting consumer boots on the ground inside stores, according to Advertising Age.

On the other hand, Walmart grew its ad budget last holiday season by about 30 percent, and may make a similar commitment this fall. Big-box stores like WalMart and Costco are predicted to fare better than other retailers for the holidays because of their low price points, similar to last year.

The National Retail Federation is now predicting that sales for November and December (including overall CE, HD, and related categories) will decline 1 percent — compared to 3.4 percent down a year ago. That 3.4 percent percentage is a bit ironic because the NRF said over the past decade prior to last year, holiday sales had typically risen an average of 3.4 percent annually.

Meanwhile, the International Council of Shopping Centers sees a possible jump in holiday sales of 1 percent, while Retail Forward, a consultancy, predicts CE and other sales simply will be flat for the holidays. While that would be good news, relatively speaking, for CE retailers and others, all these projections still point to what would be the second-worst holiday sales season of the past 40 years.