America's Research Group, a consumer research firm, lowered its 2008 holiday retail sales forecast. ARG now believes retail sales will fall 3.5 percent from last year. Previously, ARG predicted just a 1 percent decline.Chief Executive Britt Beemer told the New York Times, "When you look at the numbers, you see that over the weekend consumers were frugal and focused, staying within their budgets and concentrating on the deals and advertised specials."
Nineteen percent of the shoppers surveyed by ARG said they had already finished 90 percent of their shopping. That's up from 13.6 percent last year. About 63 percent of people polled said that they would finish their shopping in three days or less. That leaves retailers with the prospect of sluggish sales between now and the end of December when many retailers look for holiday sales to get them back into the black.
Beemer told that Times that shoppers were disciplined. They made lists and stuck to them. He found that 70.2 percent of shoppers told him that they stayed within budgets.
Some analysts are predicting the 2008 holiday shopping season will be the worst in almost two decades. I'm not surprised. Job loses are mounting, so even those who have jobs are spending cautiously. Add to the tight credit market and most maxed out consumers have no credit left to use.
This year will be painful. Retailers who were counting on this holiday season to help them survive another year may have no where to turn. Expect to see more retailers fall like the ones already gone - Linens & Things, Sharper Image and Steve & Barry's. The only question left is who is next?
Lita Epstein has written 25 books including the "Complete Idiot's Guide to Improving Your Credit Score" and "The 250 Questions You Should Ask About Buying Foreclosures."
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