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Sales projections have been downgraded, online and off, but consumer confidence appears to be rebounding.
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.
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