With little help from credit cards, retailers expect weak holiday sales
Holiday sales will be down 1 percent this year, according to the leading retail trade association, with lackluster spending by consumers unlikely to get a boost from Christmas presents put on credit cards.
According to the National Retail Federation, frugal-minded consumers are likely to shift away from credit cards and instead put holiday buys on debit cards and cash.
“Many consumers don’t like to rely on credit cards,” says National Retail Federation spokeswoman Ellen Davis, in a conference call accompanying the release of its holiday sales forecast. Davis blamed consumers’ reluctance to use plastic on the ongoing credit crunch and the fact that consumers don’t appreciate being surprised by card statements received in December and January.
The move away from credit cards continues the trends of recent years, as shown in this chart created with NRF data:
The NRF’s projection is in line with other downbeat holiday forecasts. Despite the sour outlook, the NRF says that the move away from credit cards this holiday season should help retailers in the long run. With lower debt levels going forward, consumers will be in a better position to spend “money they have readily available to them,” Davis says.
See related: Consumers expecting holiday season to be a bit jollier, Fed report: Credit tightens again, but not as rapidly