The National Retail Federation, the nation’s largest retail trade group, forecasts that holiday sales will rise between 3.8% and 4.2% even as uncertainty looms over an escalating trade war with China.
The holiday sales forecast, announced this morning, marks an increase from the disappointing 2.9% growth seen in the November and December 2018 period. Last year’s holiday sales were hurt by turmoil over President Donald Trump’s trade policy with China and a delay in data collection because of a government shutdown. The holiday forecast is above the average holiday sales growth of 3.7% over the previous five years.
The forecast comes as the economy and the job market are still strong. But the president’s trade war with China could derail economic growth. In fact, U.S. factory activity shrunk for the second straight month in September and reached a 10-year low, renewing fears of a recession and triggering a broad stock market drop.
Analysts are also seeing that the gap between the retail winners and losers is widening. Discount stores likes Walmart and Target, as well as off-price stores such as T.J. Maxx, are responding faster to shoppers’ increased shift online with expanded deliveries and better discounts. But many mall-based clothing chains and department stores continue to suffer weak sales as they struggle to lure shoppers.
Given this environment, a string of retailers like Forever 21, Barneys New York and Diesel USA have filed for bankruptcy protection so far this year as they battle online competitors like Amazon. Others like Payless ShoeSource and Charlotte Russe have shut down completely.
Read the full story from the Associated Press.
