Projections for consumer spending for the rest of the year have been downgraded slightly but are still higher than a year ago. Whether consumers truly believe that shopping is a patriotic duty or see it as a form of therapy, their spending habits nearly have recovered to pre-Sept. 11 levels, though online sales are proving slower to rebound.
The National Retail Federation has revised forecasts for the fourth quarter, predicting that spending will increase by 2.2% over last year instead of the 4% previously forecasted. The federation also predicts 2001 holiday retail sales will increase between 2.5% to 3.0% over 2000. The estimates cover general merchandise, apparel, furniture, home furnishings, electronics, and appliance stores.
Cathy Hotka, the federation's VP of IT, doubts that a fear of going to the mall will prompt a spike in online sales, but online sales appear to be recovering after a pronounced drop-off following the terrorist attacks. Internet retail sites had returned to 85% of normal weekly sales volume for the week of Sept. 17, according to comparison-shopping site BizRate.com.
Goldman Sachs analysts, seemingly unconvinced that online retailers can recover fully, lowered revenue estimates Monday for Amazon.com, Yahoo, 1-800-Flowers.com, CNet Networks Inc., and Homestore.com Inc. They also lowered their estimated 2001 sales for Amazon to $3.05 billion from $3.16 billion. Goldman Sachs' skepticism is countered, however, by the continued success of eBay Inc., which last week said it still expects to post record net revenue of $185 million for the third quarter.