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    High Gas Prices Could Hurt Holiday Retail Sales

    Discounters likely to be the most affected.

    NEW YORK -- Sales gains at U.S. retailers are expected to slow to 4.5 percent this holiday season because of higher gasoline prices and declining wages, reported Bloomberg News.

    Total U.S. sales will increase to $219.9 billion in November and December from a year earlier, predicts the National Retail Federation (NRF), a Washington-based trade group that represents 2,000 merchants and suppliers. Sales climbed 5.1 percent in 2003, the group said in a statement.

    Sales gains at upscale retailers should remain strong while growth at discounters such as Wal-Mart Stores Inc. may be tepid because their customers are hurt more by high gas prices, investors say. Retailers are counting on holiday shopping, from which they get almost a quarter of revenue, after same-store sales grew an average of 2.4 percent from June through August.

    "Higher prices at the pump have certainly cut into their sales," said John Zielenski, who helps manage about $65 billion in assets, including Wal-Mart and Target shares, at Neuberger Berman Inc. in New York. "If you see some moderation at the pump, and you are starting to see a little of that, that's certainly going to help retail generally and mass retailers specifically."

    In the last five years, Christmas sales gains have averaged 4.6 percent, rising as high as 8.3 percent in 1999 and as little as 1.2 percent in 2002. Last year, they climbed 5.1 percent, according to the NRF.

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