US retail sales growth is set to be the lowest in six years this year after retailers suffered their worst Christmas trading period since 2002.
A housing slump, rising fuel prices and higher unemployment are all contributing to the cautious consumer attitude Stateside, which could lead to shoppers trading down, according to the NRF’s quarterly retail sales outlook report published this week.
NRF chief economist Rosalind Wells said: “Retailers will again be forced to market to more practical consumers, many of whom will be looking to trade down. Even areas of past high growth such as luxury goods and online shopping will feel the pressure.”
The predictions follow the worst retail performance during the Christmas holiday period in five years, as shoppers concerned about the credit crunch stayed away from stores.
Like-for-like sales at department store business Macy’s fell 7.9% in December. Total sales were US$4.62 billion (£2.35bn) for the five weeks to January 5, down 7.4% on the previous year. This week the group said it was cutting 271 jobs, mostly in its food division. Earlier this month it said it would shut nine of its stores.
Chairman Terry J Lundgren said: “After a strong November we had hoped that a more positive sales trend would continue through December. But macro-economic trends led customers to spend cautiously for the holiday period.”
Elsewhere in the department store sector, like-for-like sales at JC Penney and Nordstrom also fell. Like-for-like sales at Saks were up just 0.8% for the five weeks to January 5.
Meanwhile, casualwear chains Abercrombie & Fitch and Gap both reported a dip in like-for-like sales for the five weeks to January 5, down 2% and 6% respectively.
Winners included supermarket chain Wal-Mart, which posted a 2.4% increase in sales thanks to discounts across the business, while sales at discount player TJX climbed 6% to US$2.5bn (£1.27bn).