10
Dec
2018
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Retail predictions

Retail Holiday Predictions

  1. IT WILL BE VERY, VERY GOOD
  2. IT MAY BE THE LAST GOOD ONE FOR A WHILE

Sales performance for retail businesses, both online and for brick-and-mortar stores, will be very, very good for Holiday 2018! Why do I say that? Three reasons.

First, 2018 has a very advantageous calendar. Second, the overall mood of the consumer is positive in spite of all the negative stuff generated by the government. And third, retailers have restructured and adjusted to account for the current environment.

Why may it be the last good holiday season for a while? First, it’s coming on top of a very good 2017, where overall sales increased about 5 percent. And you can rarely get three great years in a row. In addition, 2019 has a terrible calendar for retail holiday sales.

And One More Prediction

And here’s a bonus prediction: Retailers will not plan for that decline in 2019. By nature, they are an optimistic tribe and will always look for sales improvements. And that’s fine, but they should pay attention to the Fifth Law of Retail and “Protect Your Downside.” That is, have a plan in place on what to do if sales are not as good as expected or planned for.

Why 2018 Is Such a Great Year for Retailers

The calendar for 2018 is the most advantageous possible for a couple of simple reasons. First, Christmas Day is on a Tuesday this year. That means people will have the weekend to shop, and many will also take Monday off to do so. Christmas Eve Day is historically not a good day for retail sales, but that Friday, Saturday, and Sunday before Christmas will be huuuuge!

If that weren’t cause enough for celebration, there are 32 days between Thanksgiving and Christmas. That is nearly a week longer that usual.

More reasons for a strong retail holiday season

The consumer is in a generally good mood. Unemployment is down, and consumer sentiment is up. Restaurants, parking lots, and (unfortunately) freeways are packed. Construction continues to be up. Crime is way down nationally, and there many other things to be happy about. Sure, there are plenty of issues, but most people can brush them aside when it comes to their personal affairs and planning to celebrate the holidays.

Retailers have gone through a lot of pain over the last few years. And it is not over. It’s never over. But most retailers have made adjustments to their channel mix. That is, they’ve closed weaker performing stores in response to the growth of online sales. There’s been a “culling of the herd,” as weaker players have gone belly up altogether. And there will be more. The saddest of these is Sears, because it didn’t have to be but for the incompetence and larceny of its management.

Watch Out for 2019 Though

On the other hand, 2019 has one of the worst calendars possible for retailers. There are only 26 days between Thanksgiving and Christmas, a whole six days less than this year. For many retailers, one week before Christmas can equal the sales of the entire spring season and much more than that of the profit. If that weren’t enough, Christmas falls on a Wednesday in 2019. Statistically speaking, this is a terrible day of the week for a holiday. People will still have to work on Monday and possibly Tuesday and not be off to go to the mall. Who knows where unemployment and consumer sentiment will be a year from now? It’s been pretty darn good for about a decade . . . but that can’t go on forever.

One last variable is the weather. Yes, it does affect retail sales. This year looks to be about normal. You want cold weather at the holidays, especially in the Northeast, and we have that this year. Seasonal climate is good for selling everything from sweaters to UGG boots. But going forward, the climate is getting warmer quickly due to burning fossil fuels, and that does not bode well for future retail sales.

So there they are, my predictions for retail sales performance for this holiday season and for 2019. I invite you to bookmark this blog and check back later to see if I’m right. Better yet, sign up to receive all of my blogs on current retail events and advance publication notice of my book, The Five Laws of Retail: How the Most Successful Businesses Have Mastered Them.

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