The industries facing particularly tough conditions are home furniture and decor; consumer electronics and appliances; computer and software retailers; specialist clothing and accessory stores; cards and gift stores; and department stores.
"Retailers will be fighting hard for fewer holiday dollars," said George Van Horn, senior analyst with IBISWorld. "While that includes aggressive pricing and promotions, merchants are also entering the holidays with more conservative inventory levels and expectations. In years past, department store inventories rose during December, but this year's stocks may decline even if foot traffic is sluggish."
Make a List...and Checking it Twice
Unlike in prior years, splurging on high priced gifts will not be the theme of this holiday season. In fact, fine jewelry; plasma TVs. and large LCD televisions; as well as laptops, will take a dive in favor of less-flashy, more affordable items. Such gifts will include digital cameras, mobile phones that play videos, radio, and even offer a handy low-cost GPS feature. Other gifts sure to be popular this season include MP3 players, BlackBerrys, Apple iPods, DVDs, chocolates, wine, and gift cards pre-loaded with credit for everything from airline tickets to your favorite latte at Starbucks. This will be the season when lower-priced gifts will be more appealing than top-end.
"Consumers are painfully aware of the rocky year ahead," explained Van Horn. "Job security is a major factor reducing discretionary spending this holiday."
