California Apparel News

Despite weaker-than-expected Halloween sales and a drop in consumer confidence, the National Retail Federation predicts an increase in holiday spending will lift retail sales through the end of the year.

Halloween spending was forecast to be good, but a recent checkup on chain-store sales found that weekly sales declined 0.4 percent for the week ending Oct. 25, according to the International Council of Shopping Centers’ and Goldman Sachs’Weekly Chain Store Sales Index. ICSC Chief Economist Michael Niemira blamed the slight decline on anxiety over the macro economy.

“A blast of wintery-type weather and most likely Halloween-related buying helped lift seasonal goods and drive traffic across most of the industry,” he said. “Over the last month, sales have been very erratic with lots of external impacts from the ripple effects of the government shutdown to worry about the economy affecting the pace of demand.”

Another casualty of the government shutdown has been consumer confidence. On Oct. 29, The Conference Board, an influential, nonprofit business-research group, announced that its Consumer Confidence Index declined nine points in October. Conference Board Director Lynn Franco said that consumer confidence will remain “volatile” for the next several months due to the temporary resolution of the debt-ceiling crisis.

However, in an Oct. 29 conference call, NRF spokesperson Kathy Grannis said the leading retail trade group has forecast holiday sales to increase 3.9 percent over last year.

During the call, Pam Goodfellow, the consumer insights director at Prosper Insights & Analytics, a market intelligence company that works with NRF, said consumers still remain cautious about spending. “We have a very cautious consumer these days,” she said. “We’re not seeing a pullback in spending.”

NRF will re-evaluate the forecast later in November, Grannis said. But the group’s economists believe that holiday shopping will get an early boost because Hanukkah takes place early this year. The eight-night Jewish holiday starts Nov. 27, the earliest in the year since the 1880s. Hanukkah spending per shopper is looking to eclipse Christmas spending per shopper—although the overall Christmas spending will be higher. The NRF forecast found that Jews will spend $921 per family on holiday gifts compared with the $727-per-family forecast for holiday spending overall. “It’s a small group of consumers, but it’s important to holiday spending,” Grannis said.