Retailers’ hopes for the holiday season were already fraying from thrifty consumers and the economic downturn, and industry experts say it’s unclear whether the proposed government bailout of the financial sector will help or add to their woes.
“I wish I could sugarcoat it and be cheery and not pessimistic, but with what Congress is doing — and they haven’t done anything yet — I don’t think we have too much to get excited about,” said Chris Howes, president of the Colorado Retail Council.
The struggling housing market, rising unemployment, meager income gains and rising food and energy costs were already cutting into consumer spending. The expected government bailout may not make much difference to consumers, since they’re already being conscientious with their money, some experts said.
“Certainly it’s going to be a more modest Christmas than it was last year or the year before,” Howes said.
The National Retail Federation is predicting growth of 2.2 percent for holiday sales this season, and the Colorado Retail Council is predicting 2 percent growth. The 10-year average growth has been 4.4 percent.
If those forecasts become reality, this will be the slowest year since 2002, when sales rose just 1.3 percent.
“Current financial pressures and a lack of confidence in the economy will force shoppers to be very conservative with their holiday spending,” said NRF chief economist Rosalind Wells. “We expect consumers to be frugal this season and less willing to splurge on discretionary items.”
The financial crisis will affect inventory particularly for big retailers who don’t already have their holiday goods and could also affect the ability to hire seasonal workers.
Elizabeth Aguilera: 303-954-1372 or eaguilera@denverpost.com
