New York’s retailers forecast holiday shopping season trends: Two-thirds believe season will be bright for merchants; weekend before Christmas expected to top Black Friday (Nov. 10, 2006)

Albany, N.Y. – Two-thirds of retailers believe that the upcoming holiday shopping season will be at least as good as, if not better than, 2005, a survey of Retail Council of New York State members revealed. The Council is the state’s largest retail trade association, representing 5,000 stores of all size and variety from national chains to independent Main Street merchants.

Each year, the Retail Council conducts its Holiday Sales Watch, a survey of members between Thanksgiving and Christmas, to track retail sales and trends. The Council revamped its survey process in 2006 to include a Holiday Season Forecast, a sampling of what members believe the season will bring for retailers in New York state. The survey was conducted by mail in September and October.

When asked whether they anticipated sales during the 2006 holiday season would be better than, worse than or the same as last year’s holiday season, responses varied with nearly one-third of survey participants supporting each option:

Better than............28%
Same as.................39%
Worse than...........31%
No response...........2%

“With 67 percent of respondents telling us that they believe their sales will be better than or about the same as last year, the forecast for the holiday selling season is bright,” said James R. Sherin, president and chief executive officer of the Retail Council. “If a retailer’s sales were up 2 percent in 2005 and they anticipate their sales will be the same in 2006, that’s still positive growth in what New York merchants generally consider to be a tough economy.”

When asked to comment on their choice, participants who think the season will be a better than last year’s generally identified personal business achievements they believe will generate sales. These included moving to a new location with more parking, adding new products and adding a shopping cart to their website. Others simply indicated that they are having a good year and expect it to continue.

Other respondents less optimistic about the shopping season pointed to high energy costs – especially gasoline – as a reason why retailers may not fare as well this holiday season. Several respondents, however, indicated that recent decreases in prices at the pump would help generate sales.

Survey participants also pointed to increased competition, particularly via the Internet, to clarify why they thought their sales would be less than or the same as last year’s. Other survey participants complained that general economic hardship (defined by some respondents as high taxes, unemployment, interest and mortgages rates) might make sales falter.

Not surprisingly, weather was also at the top of retailers’ minds. While some members expected the recent devastating snow storm in western New York to negatively impact sales, retailers in other parts of the state are hoping for the right mix of wintery weather. One member wrote, “Weather… Let it snow, let it snow, let it snow!”

Finally, other survey participants noted that international tensions may play a role in the success or failure of the holiday season.

With Christmas falling on a Monday this year, survey participants clarified what day(s) they expect will be their busiest. Members indicated that the Saturday and Sunday before Christmas, traditionally always the busiest, should be the most hectic again in 2006:

Saturday/Sunday before Christmas........63%
Black Friday................................................20%
Day After Christmas...................................7%
Other............................................................10%

Other respondents believe that Saturday, Dec. 16 or Friday, Dec. 22 will be their busiest shopping days.

Gift card and certificate sales will continue to be strong this holiday season. Of the respondents who sell the popular gift cards and certificates, 73 percent expect their sale of gift cards/certificates will increase or at least remain the same as what they sold in 2005. Only 7 percent said they believe their gift card/certificate sales will decrease.

In addition to this forecast survey, the Retail Council will poll members three additional times via telephone between Black Friday and the week after Christmas to gauge retail sales and trends. A schedule of Holiday Sales Watch news releases will be available to the media the week of Nov. 20. Visit www.retailcouncilnys.com for the latest updates on the Retail Council and its Holiday Sales Watch.