November 12, 2008

BIRMINGHAM, Ala. - A retail research group has forecasted the first decline in holiday retail sales in close to a quarter century. In a report released Nov. 12, American's Research Group said it expects U.S. holiday retail sales to fall 1 percent this year, the first forecasted decline in the research group's 23 years of tracking holiday sales.

"This is certainly not welcomed news to retailers or the larger economy because of the considerable financial pressures that it places on numerous well-known companies," Bob Robicheaux, Ph.D., chairmen of the UAB Department of Marketing and Industrial Distribution. "With credit tight and less cash expected to roll in over the holiday season, we could see major carnage in the retail sector come the middle of 2009.

"This report just continues the negative trend for retailers that we saw develop in the third quarter," Robicheaux said.  "In Alabama for example, year-to-year retail sales dipped to nearly 10 percent, so this forecasted national decline is not shocking."

America's Research Group cited a survey of 1,000 U.S. consumers in its decision to forecast its holiday sales decline. The survey found that more than 40 percent of likely seasonal shoppers plan to spend less on the holidays this year than they have since the mid-1990s.

The survey's responses did seem to benefit one retailer in particular - 92.9 percent of respondents said they plan to shop at Wal-Mart this holiday, up from 85.3 percent in 2007.

"When people become more price conscious, they look to the best deal, and this year it is discount retailers that will benefit," Robicheaux said.