PRESS RELEASES

Holiday sales include sales of department stores, discount stores, home improvement centers, hardware stores, furniture and appliance stores, clothing shops, drug stores, mail order firms and the Internet.

"While our forecast calls for only modest gains this year, it is important to note that retailers will be discounting much more aggressively, which will hold down prices and make year-to-year sales look more smaller in dollar terms," said Vitner. "Stores and shopping malls will still be crowded, however, and the volume of goods sold is still expected to rise solidly."

Many retailers are going into the holiday with more inventory then they would like. Orders for the holiday season were placed well before the September 11 attacks. As a result, many stores have started their holiday sales promotions much earlier than in years past. "The automobile manufacturers have already shown us that lower prices and cut-rate financing will bring shoppers back. Now department stores are likely to try the same thing," added Vitner.

The recession will certainly factor into consumers' buying plans. Most consumers say they plan to spend the same amount or slightly less than they did one year ago. "That's not unusual," noted Vitner, "particularly with the economy in recession." But consumers have often proved more resilient than many people had thought, particularly during the holiday season. "Christmas comes just once a year and it is awfully hard for folks to cut back too much," said Vitner. "Instead they are likely to cut corners by shopping more at discount stores and buying clubs."

The calendar is also working in retailers’ favor this year. Thanksgiving comes relatively early this year and Christmas falls on a Tuesday. "That gives many shoppers a long weekend just prior to Christmas to make those last minute purchases," said Vitner.

The recession may also figure into the type of gifts consumers buy this year. "Kids might find out that they get a lot more of what they need this holiday season instead of what they necessarily want," said Vitner. Sales of clothing and household items are expected to be particularly strong this year. Sales of video games, DVD players, CDs and computers will also continue to do well, although gains are expected to trail recent years.

Regionally, Wachovia expects sales to rise the most in Florida and parts of the Southeast and West Coast, where population growth has been stronger and employment conditions have held up relatively well. Sales gains in the more manufacturing-intensive areas of the Northeast and Midwest will slightly trail the nation.

Among major metropolitan areas, Vitner is expecting some of the strongest gains to be along the East Coast. Atlanta should see strong gains, even though job growth has slowed significantly in recent months. The opening of two new shopping malls is expected to pull in shoppers from outside the metro area, helping push sales up 5% over last year.

Several Florida markets, including Tampa, Orlando and Jacksonville are expected to post gains in the 5% range and sales are expected to rise 4.0% in Miami, Fort Lauderdale and West Palm Beach.

The Carolinas are also expected to post solid gains, particularly Charlotte and Raleigh. Charlotte area merchants are expected to see gains in the 5.0% range, while merchants in the Raleigh area should see sales rise around 4.5%.

Other East Coast bright spots include the greater Washington, D.C., area, where sales are expected to climb 5%. By contrast, sales are only expected to rise 3.5% in Baltimore.

Pennsylvania and New Jersey will see gains rise roughly in line with the rest of the country. Spending in the Lehigh Valley is expected to rise 3.0% and sales in the greater Harrisburg area will increase just 2.5%.

The Philadelphia area is expected to post slightly stronger gains, with sales climbing 4.0%. Merchants in New Jersey should also see gains in the 4.0% range.

Wachovia Corporation (NYSE:WB), created through the September 1, 2001, merger of First Union and Wachovia with assets of $326 billion as of September 30 and $29 billion in stockholders' equity, is a leading provider of financial services to 19 million retail and corporate customers throughout the East Coast and the nation. The company operates full-service banking offices under the First Union and Wachovia names in 11 East Coast states and Washington, D.C., and offers full-service brokerage with offices in 48 states and global services through more than 30 international offices. Online banking and brokerage products and services are available through wachovia.com and firstunion.com.

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