222 In one of the more optimistic forecasts of how consumers would behave over the next month, the federation also projected a 2.2 percent increase in sales this holiday season. While still in positive territory, that increase is small compared with the fact that holiday sales increased 4.4 percent yearly, on average, over a 10-year period, the trade group said. Even if consumers spend the $470.4 billion that the group predicts this holiday season, it would be the smallest sales increase since the recessionary holidays of 2002. So electronics stores, apparel retailers, big-box stores, all are hustling to grab whatever cash is out there. "You've got to get your piece of the pie," Madway said. Retailers will have to lure buyers with attractive sales or by convincing shoppers that what they sell is a real value, Madway said. Retail stock prices have suffered sharp declines, and companies are desperate to rake in sales to quell fears among investors, he said. "They've got to create demand," Madway said. "They're desperate to meet their sales quotas." Despite the trade group's optimism, there is overwhelming agreement that shoppers will spend less than last year. And last year was already a tough one for retailers, who were caught by surprise when soaring gasoline prices curbed holiday spending. Per-household spending on holiday gifts this year will average $418, compared with $471 last year, according to data released last week by the Conference Board. Shopper pessimism has been building as the global economic crisis has led to rising unemployment and economic insecurity. Deloitte's annual holiday survey, conducted on the Internet between Sept. 26 and Oct. 7, found that 68 percent of consumers planned to change their shopping habits because of economic concerns. Many said they would seek sale items and use coupons, Weiner said. The findings reflected the early anxiety of the stock market turmoil that broke out in midSeptember. Among Greater Philadelphia consumers surveyed by Deloitte, 55 percent expected the economy to worsen next year, compared with 41 percent a year ago. Philadelphia retail expert Brian Ford said companies had been aggressive this year with early advertising and offers for Black Friday. "My advice is watch the sales, watch the coupons, watch the mailers," Ford said.
Villanova School of Business 2008 Media Report