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Monday, October 10, 2005

Retailers Still Dreaming of a Green Christmas

Rising fuel prices this winter have led to forecasts for a Scrooge-like holiday retail season this year. However, some analysts still believe that the 2005 season could be as good, or even better than, seasons past... even if sales patterns could shape up to be different.

A recent survey by the NPD Group has found that of the US consumers polled, 65% said that rising gas and oil prices will have little or no impact on their holiday spending plans. However, the survey also found indications that shoppers intended to be more aggressive in comparing prices and sniffing out bargains. Other surveys indicate that shoppers want to minimize their driving as much as possible to save gas.

This, of course, should be good news for both discount and online retailers. Online retail sales are expected continue growing, reaching $26 million for Q4 2005 and surpassing Q4 2004 sales by nearly 22%. For other retailers, though, it means earlier sales promotions, lower profits... and the prospect that anyone who is presently weak in the retail space might not survive the season.

The NPD survey was conducted while the weather was fairly warm, and before the true shock of rising energy prices had fully set in. Even so, it's likely that American consumers, if necessary, will cut back in other areas besides holiday shopping. What parent, after all, wants to tell the kids on Christmas morning that Santa couldn't make it this year?

Source: eMarketer