California Apparel News

America’s largest retail organization, Washington, D.C.–based National Retail Federation, released its forecast for the upcoming holiday retail season on Oct. 2. It predicted an increase of 4.1 percent over last year to $586.1 billion. 

NRF chief economist Jack Kleinhenz called the forecasted growth solid. “While moderate compared to what we experienced the last two holiday seasons, the forecast is a very pragmatic look at what to expect this year given the current rate of economic growth,” he said. 

Consumers might cut back on purchases due to anxiety from a sluggish economy, but Kleinhenz also forecast that consumers will be keen to find bargains for their holiday shopping.

Also on Oct. 2, NRF’s Shop.org division released a forecast for online shopping for the upcoming holiday season. Online sales are expected to grow 12 percent over last holiday season to as much as $96 billion, said Bob Shay, NRF’s president and chief executive officer. 

The NRF forecast is one of several holiday predictions to be released recently. On Sept. 25, the International Council of Shopping Centers stated holiday retail sales will increase 3 percent compared with the 2011 holiday season. Like Kleinhenz, NRF economist Michael Niemira said that consumers are anxious over rising fuel prices; the upcoming presidential election; and the “fiscal cliff,” or heavy federal spending cuts, which are scheduled to take place on Jan. 2 unless Congress votes against them.

In early September, market-research firm ShopperTrak forecast a 3.3 percent increase in holiday retail sales. ShopperTrak founder Bill Martin forecast a slow start to holiday shopping, which will increasingly gain momentum by Christmas.

While all of these national forecasts expected solid growth, California might be in store for a more robust holiday season than the rest of the country, said Esmail Adibi, director of the A. Gary Anderson Center for Economic Research at Chapman University in Orange, Calif.

He contends that California’s job creation is stronger than the job growth across the nation, which will translate into Californians feeling freer to spend on gifts. California added 298,700 jobs in August, a 2.1 percent increase in job growth compared with the same time in 2011, according to the Bureau of Labor Statistics. The rest of the nation experienced a 1.4 percent increase in job growth.

However, the extra holiday spending could be endangered if gas prices remain high, Adibi said. He also worried that Proposition 30, the California ballot measure, will increase income and sales taxes if it passes, which might dampen some consumers’ appetite for spending.

Kimberly Ritter-Martinez, economist for the Los Angeles County Economic Development Corp., thought California spending might be even and, perhaps, lower compared with last year.

The state experienced higher job growth, but the state still has one of the highest unemployment rates. In August, California’s unemployment rate was 10.6 percent, while the national rate was 8.1 percent, according to the Bureau of Labor Statistics.

However, consumer confidence is up, which might spur shopping. “People will surprise when they shop,” Ritter-Martinez said, noting many parents will splurge during the holidays and take extra work to pay off their debts in the new year.

—Andrew Asch