Consumer Payment Card News

Xmas Outlook

Despite the funky economy, this Christmas holiday shopping season might turn out okay. Holiday retail store sales are projected to increase 4% this year, a modest, but solid gain, compared to last year’s 5.6% increase. Overall consumer spending during the November and December holiday season may grow as much as 5.5% to 6.0%. The National Retail Federation says the economy is growing around 3.5% in the second half of this year, which should be a solid enough environment for reasonably good holiday sales. The NRF anticipates that home-related merchandise and leisure goods will do well this holiday season, and that apparel demand should pick up, as many consumers have postponed this purchase. A survey conducted for the NRF by BIGresearch found that the majority of consumers surveyed, or 62.6%, plan to spend the same amount on holiday shopping in 2002 as they did last year. Almost one third, or 29.5%, said they plan to spend less, while only 7.9% said they plan to spend more. Meanwhile, Deloitte Research says its index forecasts a rise in spending from 2.5% in the first half of 2002 to a more robust 5.5% to 6.0% by year end. The firm says consumers are coming into a great deal of cash, based on various economic factors, and historically when consumers find themselves with this much additional cash, they spend it. The Deloitte Research index draws on four indicators, including initial unemployment claims, real wage gains, taxes (personal income burden) and real home prices.

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