NMSU Business Outlook: October 2010

Special Holiday Retailing Edition of the New Mexico Business Outlook

Bruce A. Huhmann, Ph.D. and Jennifer P. Zarzosa, MBA
It’s time for our annual holiday report by Bruce Huhmann, this year joined by Ph.D. student Jennifer Zarzosa. This is one of our most popular features, so this year we are turning the entire issue over the Bruce and Jennifer. In past years Bruce has been amazingly accurate in his forecasts for the New Mexico holiday season-we’ll see how he does this year. Article references

Back-to-School

Bruce A. Huhmann, Ph.D. and Jennifer P. Zarzosa, MBA

Back-to-school retail sales are often good predictors of holiday retail sales in the fourth quarter. According to the August 2010 Commerce Department report, real personal income (adjusted to remove price changes) increased 0.2%, in contrast to a decrease of 0.2% in July. Real personal consumption expenditures (adjusted to remove price changes) increased 0.2% in August, the same increase as in July. Purchases of durable goods decreased 0.2% in August, in contrast to an increase in 1.3% in July, while purchases of nondurable goods increased 0.8%, in contrast to a decrease of 0.3% in July.

Complete Article: Back-to-School

Luxury Sales Predictions for the 2010 Winter Holiday

Bruce A. Huhmann, Ph.D. and Jennifer P. Zarzosa, MBA

We predict a 5% increase in luxury holiday sales, but the focus will be on high quality goods and services rather than conspicuous consumption. As the value of assets (e.g., homes, investments, retirement accounts, etc.) continue to recover, upper middle class and wealthy consumers are slowly regaining their feeling of affluence.

Complete Article: Luxury Sales Predictions for the 2010 Winter Holiday

On-line Holiday Shopping

Bruce A. Huhmann, Ph.D. and Jennifer P. Zarzosa, MBA

Overall, consumer holiday shopping is expected to be value-focused, with online retailers projected to see the biggest surge of consumers followed by value retailers. Consumers with annual incomes above $70,000 will drive the bulk of increased online store visits as more higher-end retailers expand their presence on the Internet.

Complete Article: On-line Holiday Shopping

Predictions for New Mexico Holiday Retail Sales

Bruce A. Huhmann, Ph.D. and Jennifer P. Zarzosa, MBA

Holiday season prospects for New Mexico retailers look slightly dimmer than for the nation as a whole. We predict a 1.5% increase in fourth quarter 2010 combined home improvement, non-store, and GAFO retail sales compared to last year.

Complete Article: Predictions for New Mexico Holiday Retail Sales

Retailing in 2010 Better than Some Predict; 2011 to be Rosier

Bruce A. Huhmann, Ph.D. and Jennifer P. Zarzosa, MBA

With the current slow economic recovery, this holiday season will bring a modest 1.5% increase in holiday sales for New Mexico retailers. Nationally, we forecast a 2.7% sales increase during fourth quarter 2010 compared to 2009 for combined home improvement, non-store, and GAFO (i.e., general merchandise, apparel, furniture and other non-auto or food) retail sales. This will be the biggest increase in fourth quarter GAFO sales since 2006, when they rose 3.6%.

Complete Article: Retailing in 2010 Better than Some Predict; 2011 to be Rosier

Some Other Factors Affecting Holiday Sales

Bruce A. Huhmann, Ph.D. and Jennifer P. Zarzosa, MBA

Consumers across the US are making a concerted effort to pay down debt. In the second quarter of 2010, total debt decreased to $2.42 trillion from $2.51 trillion in the second quarter of 2009. It remained at $2.42 trillion in July 2010. However, the national average interest rate for credit cards remains high at 14.14% in late September 2010 versus 12.32% in late September 2009, making it harder for consumers to service their debt.

Complete Article: Some Other Factors Affecting Holiday Sales

Some Retail Sectors Should Fare Better than Others

Bruce A. Huhmann, Ph.D. and Jennifer P. Zarzosa, MBA

Same-store sales or comparable store sales are the best measure of how well retailers are doing. Same-store sales compare the percent increase in sales only at stores that were operating in the current month the previous year. The useful metric removes fluctuations in net sales growth due to store openings and closings.

Complete Article: Some Retail Sectors Should Fare Better than Others

What Consumers Might Buy for Holiday 2010

Bruce A. Huhmann, Ph.D. and Jennifer P. Zarzosa, MBA

Typically, consumers spend roughly $800 on Christmas or Hanukkah gifts for important others and another $100 on themselves. The majority of gift spending on others is spent on family members ($470) and friends ($90). Also, average gift spending is roughly $35 for others in their lives (e.g., babysitters, teachers, and clergy), $22 on co-workers, $50 on decorations, $35 on greeting cards and postage, $95 on candy and food, and $20 on flowers. According to a NRF survey, 93% of U.S consumers celebrate Christmas, 5% celebrate Hanukkah, and 2% celebrate Kwanzaa.

Complete Article: What Consumers Might Buy for Holiday 2010

Talking Points

Christopher A. Erickson and James Libbin

Complete Article: Talking Points


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