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WASHINGTON - Retailers have a lot on their minds these days with an uncertain holiday season before them. Their concern is evident in the latest Retail Executive Opinion Survey, a new monthly index by the National Retail Federation and the Bank of Tokyo-Mitsubishi Ltd., which shows slightly weaker results for October.
The Retail Sector Performance Index (RSPI) for October stands at 39.5 percent, slightly down from September's 40.9 percent. Fifty percent is considered the normal range on the scale, which ranges from 0 percent to 100 percent. The RSPI measures retail executives' evaluations of monthly sales, customer traffic, the average transaction per customer, employment, inventories and a six-month ahead sales outlook expectation.
"There is a high degree of concern among the nation's retailers right now," said Michael Niemira, senior retail analyst, Bank of Tokyo-Mitsubishi Ltd. "Retailers are acknowledging that they are facing many unknowns this holiday season including a potential war with Iraq and the impact the West Coast port situation may have on inventories."
According to the survey, retailers were split on the potential impact the West Coast labor port dispute may have on inventories this holiday season. Roughly 39 percent thought the dispute would create merchandise shortages, while an identical 39 percent thought that it would not. Another 22 percent are unsure of the impact.
Overall, retailers are looking at the holiday season with the same degree of caution as consumers. Most retailers (63.1 percent) expect the pace of 2002 holiday sales to be the same or stronger than 2001. However, if the U.S. goes to war with Iraq, that outlook changes dramatically with only 10.6 percent of retailers expecting holiday sales to be the same or stronger.
"NRF expects holiday sales to increase 4.0 percent over 2001," said NRF president and CEO Tracy Mullin. "Retailers are clearly concerned with the current economic environment. NRF feels that this is going to be a heavily promotional holiday season. Consumers are certainly going to find a lot of great bargains as retailers will be enticing them to shop early."