Retailers to Expect Moderate Sales Increase

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With hurricanes Katrina and Rita fading from memory and gas prices dropping, sales forecasts project a respectable, though not stellar, holiday shopping season for retailers.


Locally, Deloitte & Touche LLP predicts that sales will increase 4 percent to 5 percent over last year. That’s a bit better than Deloitte’s national sales forecast that estimates sales will rise 3 percent to 4 percent over last year.


“Even though everybody would like those percentages to be higher, they are still not bad,” said Jacquelin Fernandez, a partner in Deloitte’s L.A. office. “Clearly, there have been a lot of economic factors all year long that have been weighing down on everything.”


Deloitte’s national forecast is below the National Retail Federation’s, which was recently raised to 6 percent over last year’s sales from 5 percent. Ernst & Young LLP is projecting that sales will jump 6 percent to 7 percent, while the International Council of Shopping Centers is on the low end of projections at 3 percent to 3.5 percent over last year.


Fernandez said that local projections vary slightly from the national projections because of Southern California weather patterns, the distance to shopping venues and local economic conditions. “There is a lot more anxiety over some of the gas prices on the East Coast because that does affect home heating. It affects us traveling to the mall,” she said.


If most projections hold, the national holiday sales increase this season won’t quite match last year’s, when sales rose 7 percent over the previous year. Still, the season could turn out to be better than some had expected when gas prices spiked and hurricane damage mounted.


Amy Gobin, a spokeswoman for Los Angeles-based clothing retailer Lisa Kline Inc., said it is anticipated that holiday sales at the Lisa Kline’s women’s store could increase as much as 20 percent over last year. She said sales at the company’s two men’s stores are expected to top that, at 40 percent over last year.


“Since the hurricanes, it has been a little tepid, but it is definitely changing coming into the holiday season,” said Gobin. “People are doing a lot of shopping. It is exciting.”


Like last year, Fernandez said Deloitte’s consumer polls show that locals will hit discount stores the most for their holiday goods. After discount stores, the Internet, department stores, electronics retailers and warehouse stores are popular places for shopping.


Also like last year, consumers polled by Deloitte reported that gift certificates remain the top holiday must-have item. Home electronics goods are expected to be in demand this year as well.

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