Gallup released their 2011 Retail Sales forecast for the holiday shopping season. They project, based on their historical data, “a modest increase in 2011 holiday retail sales, perhaps on the order of 3% to 4%.” Given that the holiday shopping season is about to begin I thought this chart on retail sales from BusinessInsider.com would be appropriate.
While Retail Sales levels have fallen off their highs (roughly 11% below peak levels) they are at 1998 levels. I show the below chart simply to reflect on a few things:
- While the economy has slowed it didn’t crash.
- The economy has rebounded nicely from recent lows.
- Consumers and businesses have been reducing their debt levels so sales are down.
The bottom line is that consumers will always buy items that their children want. The key ingredient is stimulating demand and making a product a “must have” where the real or perceived benefits far outweigh the cost or where the product / service appears “best in class.”
Dan
