While Internet sales are expected to take an even larger chunk out of the Christmas pie, Rick McAllister, president and CEO of the Florida Retail Federation, said overall consumer spending increases will also buoy storefront sales as merchants take advantage of a 32-day shopping season between Thanksgiving and Christmas.
Overall, sales are expected to rise by 5.2. percent, the largest annual increase since the Great Recession. Florida consumers, heartened by improving economic indicators and succumbing to pent-up demand, are expected to spend $58 billion.
The boost in sales will support about 42,000 part time jobs.
“Holiday shopping is great for the local economies,” McAllister said. “Families are out shopping They’re buying gas, they’re stopping for lunch. They’re buying not only what’s on their list but what they see that they would like to have.”
A number of economic indicators were used to support the projections, which out-pace national figures showing a more modest expected gain.
New home starts are up, existing home sales and median prices are higher and the state unemployment rate continues to inch down. A University of Florida study recently indicated that consumer confidence about the future is at a post-recession high.
Meanwhile, consumers have spent the past few years lowering their credit card debt and putting money into savings.
In response, major retailers have resurrected and promoted layaway options for more credit card savvy customers who are more likely to pay in cash compared to before the recession.
But frugality will only go so far, McAllister said. Having skimped on personal expenditures for a couple years, consumers are also expected to take the opportunity during the holiday season to spend more on themselves.
”All those things add up to a consumer who is more willing to spend,” McAllister said.
Merchants count on fourth quarter shoppers for up to 40 percent of their annual sales. The average consumer is expected to spend $750 this season, up 1.2 percent over last year.
Nationally, holiday sales are expected to increase by 4.1 percent to $586.1 billion, the National Retail Federation reported last month. The national prediction was higher than the 10-year average holiday sales increase of 3.5 percent. Actual holiday sales in 2011 grew 5.6 percent.
“This is the most optimistic forecast NRF has released since the recession. In spite of the uncertainties that exist in our economy and among consumers, we believe we’ll see solid holiday sales growth this year,” NRF President and CEO Matthew Shay said in a statement.
Internet sales are expected to climb 15 percent over last year, but still account for only 5 percent of overall sales. Many national retailers are more closely linking online and store sales, with many chains like Best Buy allowing customers to order online and pick up their merchandise at nearby stores.
The increase in Internet commerce highlights the need for state and federal legislation dealing with sales tax issues, a revenue source that is eluding state officials and putting brick and mortar storefronts at a disadvantage, McAllister said.
Via Michael Peltier of the News Service of Florida.