via Jane Morrissey @ Time
Experts Suggest Shoppers Seeking More Sales
Written by on Jan. 30, 2010 in Current .
A recent article by Janet Morrissey in Time predicts that (after a better-than-expected holiday shopping season), retailers should expect to see continued improvement. To John Canally, a bullish economist at LPL financial, retail sales may even rise as much as 3.5% this year, a full percentage point higher than was predicted by the National Retail Federations 2010 forecast, released earlier this week.
According to Morrissey, historic trends side with such optimistic claims. Typically, in the year following a recession, spending quickly rebounds to pre-recession levels. To most, this year's spending, however is expected to be tied to savings. This means that shoppers have grown used the last year's discounts, and so retailers may have to get used to leaner margins, and learn how to run tighter operations (less employees, less inventory, etc).
Invariably, unemployment will a role in how much retail bounces back.To Howard Davidowitz of Davidowitz & Associates (a retail-consulting and investment banking firm), unemployment should reach as high as 11% before it drops off. Perhaps not surprisingly, Davidowitz suggests that discount retailers such as Kohls, Target, and Walmart will experience better than usual growth -- but, that the recovery will not span the retail industry.
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