Retailers ‘enthusiastic’ about holiday sales prospects; estimates of 5 to 7 percent growth

Most retailers are enthusiastic about sales prospects for the holiday season. Estimates for same store sales growth of five to seven percent are expected, according to Martin Sneider, a professor of retailing at the John M. Olin School of Business at Washington University in St. Louis. “These forecasts are far more robust than the numbers posted last year. Estimates for price-driven stores like Wal-Mart and Costco are at the high end of analyst’s expectations,” Sneider says. Meanwhile, online holiday shopping is expected to grow by 20 to 40 percent, he says.

Martin Sneider
Martin Sneider

“Luxury retailers like Neiman-Marcus, Nordstrom and Saks, which have experienced strong sales in recent months are also optimistic about Christmas,” Sneider says. A few mainstream retailers like May and Federated as well as some mall specialty stores are less enthusiastic, however, as their recent autumn sales have fallen short of expectations, he says.

Sneider notes that contributing to the overall bullishness among most retailers this holiday season are signs that the customer is growing more confident of an economic recovery. “Low interest rates and refinancing cash could also help fuel a good holiday season,” he says. “Retailers who have trimmed inventories this year will be able to offer fresher merchandise and perhaps delay markdowns and promotions which have eroded profitability in recent years.” Some observers are circumspect, though, Sneider cautions, citing continued high unemployment numbers and the absence of tax rebate checks in the fourth quarter.

Items that are off to a fast start this holiday shopping season include accessories and monogrammed apparel, Sneider notes. “Over-the-knee boots along with short skirts and mesh stockings are also hot,” he says. “The Ionic Breeze room freshener from Sharper Image at $249 is selling well. Portable DVD players and IPods are also on many gift lists this year. In the home furnishings area, retro bar ware is selling quickly.”

Sneider also notes that e-commerce holiday sales are expected to increase from 20 to 40 percent this year. While some of the pure play sites like Amazon will enjoy sales gains, the biggest winners are likely to be bricks and mortar retailers who are operating companion sites, he says. “Convenience, breadth and depth of selection, and in some cases free shipping make shopping on the web this holiday season a compelling alternative.”

Sneider has taught retailing at the Washington University business school since 1992 and has spent virtually his entire career in the retail sector. From 1987 to 1995, he was president and co-chief executive of a large national multi-unit chain store operation. He was awarded the Reid Teaching Award by Olin business students in 1997 and 1998.

Sneider holds an M.B.A. from Harvard University, an M.A. from the University of Missouri, and a B.A. from Washington University in St. Louis.

He is available to comment.