Study Projects 1.0% Decrease in Holiday Sales

West Palm Beach, Fla. FTI Consulting, a global business advisory firm, released its 2008 Retail Report on Tuesday, forecasting a 1.0% decrease in 2008 holiday season sales, measured from November 2008 through January 2009, compared with an increase of 3.0% in 2007.

“As we outline in the report, this year retailers are facing multiple challenges, each of which is disconcerting in its own right,” said Kevin Regan, senior managing director and retail industry expert at FTI Consulting. “With disposable income down, the housing market in the worst shape it has been in many years and consumers grappling with rising credit-card debt, any retailer hoping to salvage the holiday season will need to work that much harder to keep cash registers ringing into the New Year.”

The key factors driving FTI’s projected change for 2008 are the deceleration of real income growth and the severe deterioration in consumer confidence.

“For the past few weeks, the sector has watched the country’s biggest retailers deliver tepid-to-terrible third-quarter numbers and offer glum forecasts for the fourth quarter. Our report confirms not only the sentiment expressed in the industry but also supports the economic facts on the ground, all of which show that the ongoing economic slowdown is having a deep impact on Main Street retailers,” added Bob Duffy, senior managing director and leader of FTI’s retail industry practice.

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