NPD Analyst: ‘Retailers Scrambling to Recover Lost Sales’

Marshall Cohen, chief industry analyst of The NPD Group, initially expected that the holiday 2010 season would “be remembered as a good year, not a great one.”

“To be great,” said Cohen right before Christmas, “the consumer would have to be in a frenzy and retailers would still be stocked with plenty of product to go around.” According to Cohen, retailers practiced the theory that it is better to sell out than to have leftovers.

On Monday, Cohen revised his outlook saying: “Holiday 2010 just went from a truly Merry Christmas for retailers to a lost weekend with retailers scrambling to recover lost sales.” Cohen called the post-Christmas weekend “brutal,” citing an already shortened post-holiday shopping weekend due to the holiday falling on a Saturday and the Sunday snowstorm in the Midwest and Northeast.

“All-in-all retailers will lose about 0.5 [percent] of sales with the loss of this big post-Christmas day. And by the time they make it up, the sales will fall out of the range of the ‘holiday numbers,’” Cohen said. “Consumers will now have to wait longer to use those gift cards and make their returns. This is an important part of the sales in that consumers tend to spend approximately an additional 16 percent above the face value of gift cards and returns.”

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