Grim Forecast for Retail Industry Ahead of Holiday Season

November 8, 2008 · By Kalyani Mukherjee Filed Under Economy Tagged as: retail industry, sales decline

Most US retailers reported double digit declines in sales on Thursday for the month of October even as the industry geared up for the crucial holiday shopping season, just days away.

The fall in October sales figures come after a lack-luster September and predict a holiday shopping season that might see some of weakest numbers in recent times. This is mainly because of restricted consumer spending which marked the steepest decline in the last seventeen year when it fell 3.1% in the third quarter.

The retail industry is also anticipating further bad news on Friday when the Labor Department comes out with the employment figures which many expect will reveal thousands of jobs lost in the past month. Job cuts are especially detrimental to retail activity since it restricts the spending power of consumers.

Another trend obvious in the retail figures of October revealed that the economic downturn had affected the entire spectrum of retailers, from the luxury stores to the discount outlets. On the higher end, luxury department chain Neiman Marcus reported the steepest drop - 27.3% - while others to experience two-digit sales decline were Abercrombie & Fitch, Gap, Nordstrom. Among the discount stores the main retailers to be affected were Costco, Big Lots, Target, Ross Stores, T.J.Maxx and others.

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