Holiday shopping expected to remain flat

09.22.09
By Nicholas Storie

It seems that consumers won't be adding to their credit card debt this holiday season in the same kind of numbers they have in previous years as a new report predicts that the ongoing recession will cause sales to remain flat.

That's the assessment of a holiday shopping forecast from Deloitte which expects sales between November 2009 and January 2010 to reach $810 billion - essentially the same number spent during the 2008 holiday season.

However, this year's forecast comes on the heels of a 2.4 percent decline in sales last year which was the first time sales fell since 1967, according to Commerce Department figures analyzed by Deloitte.

Carl Steidtmann, chief economist at Deloitte Research, says that while there are recent signs that the economy is improving, rising unemployment and limited credit are causing consumers to rethink purchases that they may have quickly made in the past.

"Americans continue to save at historically high rates while also paying down debt, and these factors combined suggest another chilly holiday season for retailers," he said.

But it doesn't seem that retailers are backing down on their attempts to get Americans to make purchases this year.

Recently, Toys 'R' Us announced it would be opening 80 temporary stores in locations around the country to help alleviate some of the expected onslaught of business this season. These so-called "pop-up" stores will begin showing up sometime next month and will be in addition to the more than 260 temporary stores which will appear in all of the company's Babies 'R' Us locations.

Perhaps realizing that many consumers are backing away from making purchases with their credit cards, Sears and Kmart have unveiled a Christmas club card which allows consumers to add value to the card to make purchases at a later date.

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Consumers may not be opening their wallets this holiday season