Q4 retail sales will hit a 5-year low in growth, forecasts Retail Forward
Online sales will be the bright spot in a slowing retail sector this holiday season, says a new forecast from consulting and research company TNS Retail Forward Inc.
In an otherwise gloomy report forecasting retail sales growth of 3.3% in the fourth quarter, TNS Retail Forward expects online sales to grow at 18.5%, reaching, by TNS Retail Forward’s estimate, $42 billion in Q4, up from $35 billion a year ago.
Retail sales growth of 3.3% would put Q4 growth at a level it hasn’t seen since the recession year of 2002, when Q4 growth was 3% over the prior year. Q4 growth last year was 4.6% and in 2005, 7.4%.
"The credit crunch will lead to a consumer crunch by the holidays,” says Frank Badillo, senior economist for TNS Retail Forward. “This will extend the weakness in retail sales beyond home improvement stores to other retail channels."
In fact, Badillo says, the strength of online sales could mask the overall weakness of retail sales. "Our forecast numbers are even weaker when home improvement and catalog retailer sales and online sales are excluded,” he says. “And, the risks are biased in favor of still weaker growth, particularly if the housing market deteriorates further."
In addition to online, TNS Retail Forward says mass merchants, especially supercenter stores and warehouse clubs, will fare the best.
Back...
