Kearney Leaderboard

Another tough holiday sales season foreseen

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NEW YORK — Chain drug retailers may well escape the worst of what is expected to be a poor holiday sales season.

Drug chains have been outperforming other trade classes, and demand for flu shots is expected to help sustain their momentum, notwithstanding generally gloomy forecasts for retailers overall.

According to the National Retail Federation (NRF), holiday retail sales will go from worse to bad. NRF projects that November and December retail sales will dip 1% to $437.6 billion, an improvement over last year’s 3.4% drop and better than the 3% decline forecast for all of 2009.

“As the global economy continues to recover from the worst economic crisis most retailers have ever seen, Americans will focus primarily on practical gifts and shop on a budget this holiday season,” says NRF chief economist Rosalind Wells.

Though some signs of a recovery have begun to emerge, including better-than-expected sales in August and momentum in the stock market, continued consumer uncertainty over jobs and home values will take a toll on spending over the holidays.

And as retailers become even more promotional, such popular holiday categories as apparel and electronics may experience deflation because of aggressive discounts.

Retailers have been experiencing a pullback in consumer spending for more than a year now, according to NRF president and chief executive officer Tracy Mullin.


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