Retailers React to Lackluster Holiday Predictions [AUDIO]
It's not even Halloween and already, many of the nation's retailers have rolled out the holiday displays and launched big sales promotions earlier than ever in anticipation of what experts have predicted will be a lackluster holiday shopping season.
But, just how accurate are the predictions? How important are the projections in planning for the most important time of the year for retailers?
"When it comes to holiday sales and forecasts, the numbers that are released from various groups set the tone for what to expect from the economy and what to expect from consumers," said Kathy Grannis, spokesperson for the National Retail Federation. "The numbers do a lot more than just give you a glimpse of how sales are going to increase. It actually gives you a glimpse into where the economy is in terms of consumer confidence and retailers' confidence in shoppers to spend money."
Holiday sales traditionally count for up to 40 percent of a store's annual sales, so a great deal can depend on the accuracy of the predictions experts make about just how much shoppers will buy during the holiday shopping period. Some merchants use the predictions to decide a number of things from how much product to stock to how many seasonal hires they should make.
"I think a cross between a calendar conundrum and that question about consumer confidence and the ability to attract sales is driving retailers to start rolling out their promotions and start talking holiday speak sooner this year than they may have any other time," said Grannis.
"It's important to remember that forecasts of any kind really are an art and not a science. Every year, whether we hit the mark or we miss the mark is less important than making sure we are out there with a very realistic view of what we think is going to happen during the biggest time of year for retailers."
"Retailers also have their own team of economists behind their own doors that are planning and preparing for the holiday season months before the season rolls around," said Grannis. "Retailers are measuring consumer sentiment throughout the year, so numbers may not actually shift retailers into motion because they have to plan so far ahead of time, but they certainly help the companies understand where they might end up by the end of the year."