Professor offers Grinch-like outlook

Nov. 17, 2005 at 6:30 PM
share with facebook
share with twitter

WEST LAFAYETTE, Ind., Nov. 17 (UPI) -- This holiday season holds little prospect for U.S. retailers to enjoy any huge sales increases, a Purdue University retail expert said Thursday.

Richard Feinberg, director of the Purdue Research Institute, expects an increase of just 2 percent to 4 percent this year over last year's holiday shopping receipts.

Also on the increase are Internet sales, which are expected to rise to $26 billion -- up 22 percent from last year's $21 billion, but still just 10 percent of total holiday shopping receipts. U.S. consumers will spend about $260 billion this holiday shopping season.

"A strong holiday shopping season is thought to influence broader economic cycles," says Feinberg. "A strong season means retailers have money to stock shelves in the new year and don't have to borrow for the new year, which leads to more profits. This gets the next year's economy off on the right foot.

"On the other hand, a weak season means the retailer must borrow to stock the shelves, which means less merchandise, lower profits, less hiring, less expansion."

All of these effects bode poorly for retailers after New Year's, says Feinberg, who also is a professor of consumer sciences and retailing.

Related UPI Stories
Trending Stories