Market Overview

U.S. Retailers Forecast 3.7% Increase in Holiday Comparable Stores Sales, BDO USA Survey Finds


Despite uncertainty around how the presidential election will impact the economy and consumer spending, retailers are confident headed into the holiday season. According to a recent BDO USA survey, chief marketing officers at leading U.S. retailers expect a 3.7 percent increase in holiday comparable store sales. This marks the survey's most optimistic forecast since 2007 when CMOs projected a 5 percent increase in comparable store sales.

Holiday Season Comparable Store Sales Forecasts
2012     2011     2010     2009     2008     2007
+3.7%     +2.1%     +2.8%     +1.6%     -2.7%     +5.0%

Amid a flurry of new tablet announcements from tech giants including Apple, Microsoft and Google, a majority of CMOs (62 percent) say consumer electronics will be the strongest selling category in 2012. The continued confidence in consumer electronics sales is likely fueled by similar expectations from 62 percent of CMOs that the category will see the most discounts and promotions during the holiday season. Price-matching programs at Target and Best Buy suggest that retailers will be battling with both online and brick-and-mortar retailers for these purchases.

“While we haven't returned to pre-recession levels of optimism, retailers are gearing up for what looks to be a promising holiday season,” said Doug Hart, partner in the Retail and Consumer Product Practice at BDO USA, LLP. “Still, consumers have more choices than ever, and retailers are looking to avoid showrooming by curating a mix of exclusive and top-selling products to get consumers in their door or on their site.”

These findings are from the most recent edition of the BDO Retail Compass Survey of CMOs which examined the opinions of 100 chief marketing officers at leading retailers located throughout the country. The retailers in the study were among the largest in the country, including 20 retailers in the top 100 based on annual sales revenue. The telephone survey was conducted in September and October of 2012.

Additional findings of the 2012 BDO Retail Compass Survey of CMOs include:

Total Holiday Sales Projected to Increase 4.7 Percent. Retailers are especially confident on total sales for the holiday season. A majority (56 percent) forecast an increase in holiday sales, up from 41 percent in 2011. On average, CMOs project a 4.7 percent increase, which reflects slightly more optimism than the 4.1 percent projection released by the National Retail Federation in October.

Gift Cards Continue to be a Popular Choice. Gift cards have become a $100 billion industry, and sales are expected to increase again this year. Of retailers who sell gift cards, a majority (58 percent) expect gift cards sales will increase. The rise in popularity is likely due in part to the rise in digital gift cards from retailers like Starbucks, Home Depot and Amazon. With gift card sales expected to be strong in November and December, retailers can expect solid headwinds for January sales as shoppers begin redeeming.

Inventory Levels Steady, but Shoppers May See More Variety. Despite the optimism for consumer spending, most CMOs (61 percent) expect holiday season inventory purchases will stay at about the same levels as last year. CMOs forecast a one percent increase in inventory levels, which is consistent with the projections cited in BDO's September survey of CFOs. CMOs are more divided about whether SKUs (stock keeping units) will increase (40 percent) or remain consistent (46 percent) with what consumers saw in 2011. On average, CMOs expect SKUs to increase 1.2 percent during the holidays, meaning shoppers may see slightly more variety on the shelves this year

Unemployment Remains Greatest Risk to Holiday Sales. While the unemployment rate remained below 8 percent this month, unemployment levels are still a top influencer of consumer spending. As a result, it's no surprise that when asked what issue will have the greatest impact on holiday sales, 55 percent of CMOs point to unemployment. Unemployment was also the top worry for CMOs in 2011. Other CMOs (25 percent, up from 17 percent in 2011) cite energy and fuel costs as having the most impact on holiday sales.

The BDO Retail Compass Survey of CMOs is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief marketing officers, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation's retailers.

About BDO

BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 45 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,118 offices in 135 countries.

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit:

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