Ugh! That probably best describes the holiday forecast just out from the National Retail Federation (NRF). The retail association projects that sales will increase only 2.2 percent during holiday season 2008, to $470.4 billion.
This gain, NRF reports, would fall well below the 10-year average of 4.4 percent and would represent the slowest growth since 2002, when sales rose only 1.3 percent.
NRF Chief Economist Rosalind Wells blames the grim outlook on “current financial pressures and a lack of confidence in the economy.”
Well, in the wake of the disastrous news from Wall Street, I’d say Wells got that right.
Oh, and that’s not all the bad news. With the current financial industry crisis continuing to chip away at consumer confidence, NRF notes that it sees no economic turnaround until the second half of next year.
What’s a retailer to do? Well, it won’t hurt to sharpen up your customer service. Have a staff meeting and talk about how you can improve this area.
Next to that, make sure you are reaching your customers (probably through e-mail) and letting them know what’s in your store that they might like. I’ve said it before, but I’ll say it again: This could be the time to reinstate layaway. Allow your customers to put away items now so that they can have them in time for holiday giving.
Look at your merchandise, see what you can discount to pull customers into your store. Once they arrive in your store, be sure that everything is perfect from your window display to your racks to specials to smiling and helpful employees.
It’s difficult for people to part with money when it is tight, so do what you can to make it less painful.