California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

It’s Black Friday and the forecasts for this year’s holiday shopping season are
mixed, however, even the best can be painted blue. 

For retailers according to the National Retail Federation, NFR estimates that the
holiday season can represent anywhere between 25 to 40 percent of annual sales. 
However in 2008, holiday sales represented only 18.5 percent of the total retail
industry sales.

The NFR in their annual forecast predicts a 1 percent decline in holiday sales
this year, the first time in nearly 30 years that US retail industry would see
back to back declines. If NFR is correct that will make sales at $437.6 billion.

The International Council of Shopping Centers, ICSC is a bit more optimistic and
projects US holiday sales for 2009 will increase by about 1 percent.  Shopping
center sales are expected to grow by 1.8 percent.  However, ICSC is worried that
due to low inventories held by retailers this year most shoppers will shop primarily
on Black Friday, because with the low inventories, products will not be available
later in December.  Retailers have bought low inventories this year due to the
uncertainty of the economy caused by the high unemployment rate and whether the
consumer will purchase, thus they want to ensure that they are not stuck with
after the year inventory.  Thus, low inventories may force customers to stores
just once – Black Friday.

Shop on!

I am Tim Johnson and this has been the California Business Minute.