While many market research firms are projecting a slight increase in holiday sales, one global business advisory firm, which has a track record of accurate projections, is forecasting a 1.0% decrease in holiday season sales. The key factors driving down this year’s sales are the deceleration of real income growth and the severe deterioration in consumer confidence. FTI Consulting says that year-over-year real disposable income and wage growth has slowed sharply since mid-2007 and is now close to zero for various measures of real personal income. Real wage growth is currently running slightly negative, something
that has only occurred during the previous six recessions. FTI’s analysis shows that the previous stimulus checks sent out in May and June barely moved the economic needle in the subsequent three months. Additionally, FTI concurs that shoppers have become a bit wary of gift card purchases with so many retailers failing and liquidating this year.
HOLIDAY SALES HISTORICAL
Source: FTI Consulting