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outlook for retailers The deals they're offering consumers are incredible Dec 1, 2009 Last year was a truly dismal holiday retail season, with sales falling 3.4 percent after five straight years of at least 2 percent year-to-year growth. Retailers were hit hard. Even a month before the holiday sales season began, forecasters were still calling for modest growth. Ultimately department, discount and online stores were left with excess inventory and disappointing results. This holiday season, retailers both on- and offline seem better prepared. With the nation now well more than a year into the worst recession in decades, and unemployment rates still high, retailers have reduced inventory and increased their bargains, hoping to lure buyers off their couches and into the stores. At the least, it should make for a more orderly holiday retail season, and it's still possible that sales could surpass last year. The National Retail Federation has forecast a 1 percent decline in holiday sales this year, and indeed spending per person was down on Black Friday weekend, though more people turned out seeking bargains. That seems to indicate that consumers still believe the economy is fragile. The NRF's Kathy Grannis talks to Media Life about what other holiday spending is being cut, why retailers chose to advertise early, and whether 2010 will be better. Why are people planning to spend less this year despite some signs that the economy is improving? The unemployment rate and consumer confidence are a few main reasons why people will hold back this year. Consumers are still not convinced the economy is improving. When consumers cut spending, it's not just on holiday gifts. What other areas are Americans cutting back on (ex.: new decorations, holiday travel, etc.) and why? More than 80 percent of shoppers said they would spend less overall this holiday season, that includes spending on decorations, gifts, food and holiday travel. Are there some areas where people refuse to curb spending? People will still spend on gifts for their family, but they will invest in practical and creative gifts instead. Digital cameras, monogrammed jewelry and even gift cards will be high on people's list for family members this year. How much more important is it for advertisers to emphasize bargain hunting this year over past years, and what are some innovative ways they are doing it? Retailers began their holiday promotions a little earlier this year to entice shoppers to come into their stores. With every retailer competing with each other these days, special promotions such as layaway and discounted toys and apparel will be big winners as people begin their shopping. What are the biggest changes you've seen in consumers' shopping habits between this year and a few years ago, before the recession hit? Shoppers have pulled back on their discretionary spending for the last year as they worry about their job security and other concerns. Many people are only buying necessities such as groceries and health and personal care items and cutting back on things they would sometimes treat themselves to throughout the year such as electronics and apparel. When will we see holiday spending levels return to pre-recession levels? There's no way to tell, hopefully 2010 will be a turning point for shoppers.
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