What’s your holiday season forecast?

Unemployment levels - currently at 9.8% - restricted credit availability and the uncertainty over job security and income are all factors that will have consumers treading lightly with regards to spending this holiday season. And though, Federal Reserve Chairman, Ben Bernanke, declared last month that the recession is very likely over, he did caution that the economy will still feel weak for some time. This is evidenced by consumer confidence, consumer credit outstanding and holiday forecasts.

According to The Conference Board, consumer confidence retreated slightly in September to a reading of 53.1 (1985=100) from 54.5 in August. Per Lynn Franco, Director of The Conference Board, “…consumers remain quite apprehensive about the short-term outlook and their incomes.” And, perhaps this is what is keeping consumers in “save” mode or “pay-off debt” mode rather than allowing themselves to spend disposable income. Overall consumer credit outstanding decreased at an annual rate of 5.8% in August per the latest figures from the Federal Reserve. However, while reducing consumer debt is good for the long run, some economists are worried that the lack of consumer spending will further weaken the economic recovery.

According to the National Retail Federation, holiday retail sales are projected to decrease 1% this year to $437.6 billion. Says NRF Chief Economist Rosalind Wells, “As the global economy continues to recover from the worst economic crisis most retailers have ever seen, Americans will focus primarily on practical gifts and shop on a budget this holiday season.” Retail Forward and Deloitte are both predicting flat growth for this year’s holiday season, while the International Council of Shopping Centers expects a 1% increase.

Frank Badillo, Senior Economist for Retail Forward notes, “The emerging recovery will be driven by growing confidence among households in response to, among other things, subsiding job cuts by businesses. Businesses, in turn, are taking their foot off the brakes in light of leaner inventories and expectations that pent up demand and economic stimulus will soon require new business investment.”

On a positive note, the High Point market kicks off this weekend and buyers are expected to place orders to replenish low inventory levels. Interestingly, Gallery Furniture  is even getting the consumer into the “market”. This Top 100 store is allowing a few customers to do some of their store’s buying at market.

There’s no doubt, retailers are getting extremely creative and savvy in their marketing efforts. So, what about you? What’s your holiday season forecast? What’s your company doing to boost holiday sales and gear up for 2010? You all have probably thought about it, but now is the time to show your zest for the industry and how resilient your company is. Some would say, now or never. I think the majority will choose now!