Gift-wrap analysis reveals dim outlook

By Heather Landy
Bloomberg News Service

SAN FRANCISCO — Peter Appert's holiday sales forecasts have been right on the money for 15 years in a row. Retailers won't like his prediction this year.

A man examines the selection of wrapping paper at Papyrus in San Francisco. Peter Appert, an analyst, forecasts holiday sales by analyzing the sales of wrapping paper. Bloomberg New Service library photo

Forget the fact that Appert isn't a retail analyst, or even a gift-wrap analyst. He follows publishers such as Dow Jones & Co., New York Times Co., Scholastic Corp. and McGraw-Hill Cos. He did used to cover greeting-card companies, many of which make gift wrap. That's when he began tracking wrapping-paper shipments and retail sales, and found a tight correlation between the two.

"We expect total gift-wrap volume to show its weakest performance in over a decade in 2001," he wrote in his annual gift-wrap report. "This should translate into weak holiday retail sales as well."

Sales of nondurable goods will rise 0.2 percent from last year's fourth quarter, according to Appert. That would trail the 2.8 percent pace of the first nine months of the year, and the 5 percent pace achieved in last year's fourth quarter.

Appert's index excludes durable goods, such as cars and refrigerators, because they're rarely gift-wrapped.

Appert doesn't claim to be able to peg the precise percentage change in sales. Last year, he forecast a fourth-quarter increase of 2.6 percent. The gain was 5 percent.

What his index unfailingly has foretold is the direction and magnitude of the change. Each time the year-to-year increase in gift-wrap shipments picked up in the fourth quarter from the first nine months of the year, retail sales grew at a faster pace, too. When growth in gift-wrap shipments weakened, the pace of sales growth decelerated as well.