Firm does not expect holiday sales decline

-- Home Textiles Today, 10/29/2009 9:08:00 AM

Toronto – Retail advisory firm Karabus Management, a subsidiary of PricewaterhouseCoopers LLP, is projecting flat to 1% growth in U.S. holiday sales this year. 

“Across all channels, retailers have reduced costs and are better prepared for this holiday season than they were last year,” said Michael Unger, managing director in Karabus’ Performance Improvement practice. “In addition to reducing capital expenditures, store occupancy costs and labor expenses, retailers have turned to aggressive inventory management practices that will result in higher earnings this year. While unemployment and the credit crisis will have a continued impact through the holiday season, people are tired of the gloom and doom. Consumer sentiment remains low but has spiked relative to recent months with retail therapy poised to make a comeback.”

Karabus believes Halloween will serve as a better barometer for holiday sales than the recent back-to-school season. This is especially true for forecasting the holiday spending intentions among adults 18-45 years old, the company reported.

The company also believes the small increase in August and September sales signaled a shift in consumer sentiment “that should carry through 2009 into 2010.” However, Karabus expects consumers will continue to trade down, favoring discounters and value-oriented specialty retailers.