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Retail Forward’s just-released Index of Future Spending suggests that the softness in consumer spending that took place in late summer is likely to persists into the early fall.

“The softer pace of sales expected this month is the result of moderating spending plans among Middle and Down Market households, offsetting a further strengthening among those in the Up Market,” said Steve Spiwak, an economist with Retail Forward. “The result should be healthy sales at high-end retailers in October, while discount retailers should see sales continue to grow at a modest pace as the holiday shopping season approaches.”

Retail Forward’s ShopperScape also predicts that holiday consumer spending is likely to be more robust in Up Market households than in Middle and Down Market households. Among Up Market households, 23 percent said they plan to spend more on holiday gifts this year than last year, compared with 21 percent who plan to spend less. Twice as many Down Market households indicated they will spend less (32 percent) than will spend more (17%) during the holidays, while 27 percent of Middle Market households plan to spend less this year, compared with 20 percent who plan to spend more.
KC's View:
A lot can happen in the next four to six weeks. We don’t think there is any sure bet about how the holiday season will go in 2004.