• by Sarah Mahoney  @mahoney_sarah, September 13, 2011

A funny thing happened on the way to the fourth quarter: Instead of the gradually building economic recovery most retailers had been anticipating, lousy economic headlines cast a cloud over Christmas before they had a chance to put out their Halloween candy. But not everyone is downbeat.

"We're actually pretty optimistic for Christmas, and the fourth quarter as a whole," Craig R. Johnson, president of Customer Growth Partners, a retail consultancy based in New Canaan, Conn., tells Marketing Daily. "The problem with so many of these surveys is that people are very poor predictors of their own spending behavior. They may say they intend to spend less -- but in fact, they actually spend the way they always do, which means a little bit more each year."

He tells us what else he is expecting in the next few months:

Q: So you think the holiday will be solid?

A: Decent, but not a record breaker. We predicted that back-to-school would be up 6%, and that looks like it will be on target. And we expect Christmas to be up between 4 and 5%, on a year-over-year basis, as long as there isn't some big change like gas prices going above $4 a gallon again.

Q: What about channel shifts?

A: Department stores, which have seen their share of market go up for the first time in 25 years, will continue to do well. They used to be 10% of the market, and bottomed out at 2.4% in '09; we think they will end up with something like 2.6 or 2.7% share this year. And that's really good, when you think about the shape Sears is in. Macy's is on a major rebound and at the high-end, chains like Saks and Neiman Marcus are very healthy, growing 11 to 12% year-over-year.

Q: So what are they doing right?

A: They started doing poorly when consumers realized they offered the same-old, same-old -- but at higher prices. Shoppers figured, 'If it's the same old stuff, why pay more?' But look at the huge homerun Macy's just had with its Karl Lagerfeld capsule collection. People know it's exclusive; they can only get it at Macy's. And it's going to sell fast, so they better hurry. It's the same reason discount chains like TJMaxx and Ross are doing well. They are all providing shoppers with something they value, whether it's an exclusive item or a good price point.

Q: What about Walmart?

A: We think it will have a bit of a rebound too -- and right now, that's being led by strong performances at its international division and at Sam's Club. But in its domestic unit, apparel is going nowhere and home still lags sharply. While electronics had been bright for Walmart, the prices on those flat-screen TVs continue to decline, so that's a problem.

Q: But that's true for stores like Best Buy as well, right? And any chain that sells electronics?

A: Yes. Well, Best Buy is also getting hammered by Amazon. But the good news is that tablets, e-readers and smartphones have been as good for Walmart as they have for everybody else, and they will all be strong sellers this holiday.

Q: What about the clubs?

A: The club format is still very spot-on. The average household income at Costco, BJs and Sam's tends to be much higher than the national median -- in the $70,000 range -- so they are a little more immune to the economic downturns. Also, this channel does really well with new Americans, who tend to buy in bulk so they can divvy those purchases up with their extended family in different households. And the club format overall benefits from higher gas prices. People typically go there because they have lower fuel prices, and while gas is not much of a moneymaker for these chains, they benefit from the increased trips.