From this morning's Chicago Tribune, (a scoop? report's not due out until next Tuesday..) Essentially says that with rising gas prices and a return to reality in the perception of home values, holiday shoppers will be looking for bargains, and merchants will be pushing discounts and promotions. The National Retail Federation looks to a 5% rise in dollars spent 2006 over 2005.


`Promotional holiday' forecast points to merry bargains
By Sandra Jones
Published September 19, 2006

If you're a shopkeeper, it's never too early to start worrying about the crucial holiday shopping season.

This year, retailers are already fretting that high gas prices and a slowing housing market will put a crimp in spending. That should givebig discount chains and warehouse clubs the advantage as shoppers look for deals. The bottom line for consumers: a very merry holiday season filled with bargains and promotions.

"I think it will be a promotional holiday," said Tracy Mullin, president and chief executive of the National Retail Federation, a Washington, D.C.-based retail trade group. "There is so much competition. Retailers will have to try to find new, creative incentives to get consumers in their stores. It will be interesting to see what tricks they have up their sleeves."

A report due out Tuesday from the National Retail Federation forecasts retail sales for the holiday months of November and December will rise 5 percent from the $457.4 billion spent during holiday 2005. That is lower than the gains of 6.1 percent for holiday 2005 and 6 percent for 2004, but above the 10-year average increase of 4.6 percent.

In the past two years, "consumers were feeling pretty fat and happy" as they watched the values of their homes soar, Mullin said. "A lot of consumers tapped all the equity in their homes to finance big purchases like appliances and cars. A lot of that equity is no longer available."

This is hardly cheery news for retailers who depend on the combined months of November and December for 20 percent of their annual sales, according to the trade group.

One bright spot for retailers: For the first time in years, clothing will be making it onto plenty of wish lists, based on trade group surveys that revealed consumers are ready to replenish their wardrobes.

Earlier this month, Retail Forward forecast a sales gain of 5.5 percent for the holiday, a pace it characterized as "moderate" and below the average of the past 10 years. The firm said retail sales climbed 7.2 percent in 2005 and at a rate of more than 6 percent in 2003 and 2004.

Retail Forward measures the holiday shopping period as October through December, one month longer than the National Retail Federation.

The Columbus, Ohio-based retail research and consulting firm predicted sales at warehouse clubs and big discount chains will outpace those of most other retailers, while department stores will lag