Is Holiday Season Set to Lose Momentum? - Analyst Blog
20 Dicembre 2012 - 4:20PM
Zacks
Nothing concrete can be said about
the outcome of the holiday season at this present juncture. It is a
wait-and-watch game to find out if retailers will be rewarded, or
if they fall weak against the negative consumer sentiment largely
due to the looming “Fiscal Cliff”. However, the latest data
unveiled by ShopperTrak hints at a slower growth forecast than
previously expected.
The Chicago-based retail analysis
firm now projects holiday sales for November and December period to
rise 2.5%, down from 3.3% increase previously forecasted in
September 2012. The current estimate also fares unfavorably with
3.7% growth achieved in the prior-year holiday season.
The retail foot traffic data
provider, ShopperTrak trimmed its holiday sales forecasts blaming
the huge discounts offered by retailers to entice consumers, and
the adverse impact of Hurricane Sandy that derailed November
comparable-store sales.
However, on the positive front,
ShopperTrak reiterated that foot traffic in this holiday season
will rise 2.8% compared with 2011, which experienced a 2.2% decline
in foot traffic from 2010. If the estimate is true, this will be
the first increase in foot traffic during the holiday season since
2008, when the economy slumped to recession.
ShopperTrak also revealed that foot
traffic jumped 15.1% and retail sales surged 16.4% for the week
ending December 15, when compared with the previous week. However,
comparing with the prior-year period, foot traffic and retail sales
dropped 4.4% and 4.3%, respectively, for the week ending December
15. ShopperTrak also suggested that the week ending on December 22
may witness the highest sales volume in 2012.
Thus, we need to wait to find out
how the total December sales turn up; i.e., whether it fares better
than November or succumb to the current economic upheaval.
According to the data released by the U.S. Department of Commerce,
total retail and food services sales jumped 0.3% in November,
rebounding from a decline of an equivalent percentage in October.
(Also Read: Will December Mirror November Sales?)
Analysts are anticipating sluggish
economic growth as companies seem reluctant to make any prudent
investments until a negotiation regarding the Fiscal Cliff issue is
reached between the Republicans and Democrats before the onset of
2013. The austerity measures and fear of impending tax hike are
creating some panic among consumers. In recent days, the Street’s
mood doesn’t seem much optimistic as investors remain apprehensive
about the failure on the part of policy makers to reach a
consensus.
The Dow Jones Industrial Average
(DJI) shed 0.7% to close at 13,251.97 on December 19. The S&P
500 dropped 0.8% to end the day at 1,435.81, whereas the tech-laden
Nasdaq Composite Index dropped 0.3% to close at 3,044.36.
Sensing the pulse, retailers such
as Target Corporation (TGT), Macy’s
Inc. (M), Kohl’s Corporation (KSS),
Nordstrom Inc. (JWN), Costco Wholesale
Corporation (COST), Limited Brands Inc.
(LTD) and others will be actively making efforts to win the hearts
of bargain hunters. Despite the lingering economic concerns, we
hope the arrival of Christmas will guide demand higher and ease
consumers’ apprehension.
COSTCO WHOLE CP (COST): Free Stock Analysis Report
NORDSTROM INC (JWN): Free Stock Analysis Report
KOHLS CORP (KSS): Free Stock Analysis Report
LIMITED BRANDS (LTD): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
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