Nov 30, 2011

IBISWorld Forecasts Holiday Sales to Grow 3.3 Percent in 2011

Los Angeles, CA – After a strong Black Friday and Cyber Monday, overall holiday expenditure is expected to increase 3.3 percent to $64.3 billion, according to industry research firm IBISWorld. During the six-week period from Nov. 1 through Dec. 25, lingering unemployment will keep holiday retail sales from hitting pre-recessionary levels, despite the decline in aggregate household debt. However, retailers can still expect an uptick across all holiday categories.

IBISWorld expects consumers to spend 3.4 percent more on gifts this year, compared to 2010. Leading categories for gifts will be jewelry, which is slated to grow 7.1 percent to $4.7 billion, and electronics, which is forecast to increase 6.8 percent to $7.0 billion.

“The luxury market has led the economy in recovery, showing signs of growth throughout 2011,” said IBISWorld senior analyst Nikoleta Panteva. “The holidays are an especially appropriate time for consumers to purchase splurge-worthy items like jewlery for their loved ones.”

Electronics are expected to fare well this season due to the onslaught of new product introductions calling for gadget upgrades. Consumers will look to get theirs hands on hot items like tablet computers, touchscreen phones and e-readers.

Clothing purchases are expected to make a comeback this year, increasing 3.4 percent from 2010 to $8.5 billion. High-end, designer wear and children’s apparel are likely to lead the pack in sales growth, seeing that they were put on the backburner in the past few years.

Personal care and cosmetic items are likely to underperform the other gift segments, with revenue for this category growing a mere 1.6 percent to $4.9 billion. Perfumes and scented body lotions are expected to be the best sellers within this group, but there are few new product introductions, so sales will be limited. Additionally, the lack of product introductions and consumers’ need for more personalize items will cause the home and garden category to underperform as well, growing by only 1.1 percent to $5.7 billion.

Gift card sales will only increase by 2.8 percent this year from 2010, to $5.7 billion, due to consumers’ need for more personalized gifts. Nevertheless, they will be a mainstay in the holiday season.

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About IBISWorld, Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit www.ibisworld.com or call 1-800-330-3772.