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By Matthew Verrinder NEW YORK (Reuters) - There's nothing like a picture of a child with Santa Claus -- especially since the number of parents who line up in stores to get these photos taken could indicate the health of the holiday shopping season. That's just one measure that some Wall Street analysts use to try to get a leg up on predicting holiday spending, which accounts for nearly one-fourth of annual retail sales. While their more conventional colleagues are visiting malls, counting customers with shopping bags and cornering clerks for the scoop on hot items, some experts are also extrapolating their estimates from off-beat endeavors like scoping out suburban Christmas tree lots and tracking gift wrap sales. Some analysts start driving by mom-and-pop tree lots or hardware chains like Lowe's Cos. (LOW.N: Quote , Profile , Research ) right after Thanksgiving. Others keep an eye on Santa stations in malls and department stores across the United States. If the trees sell off quickly and the lines for photos are long, analysts assume that early consumer confidence and mall foot traffic are high. "Christmas tree sales and Santa photo sales are emotional quotients that are always in line with the hard retail sales figures," said Marshal Cohen, chief industry analyst with New York-based market research firm NPD Group. "They show when the retail action will take place during the season and whether retailers will have to hold sales to stimulate the consumer." Other analysts look for indications of what the retailers are expecting. Goldman Sachs analyst Peter Appert came up with his Appert Gift Wrap Indicator 18 years ago because he had too much time" on his hands and "too much training in statistical methods." Retailers order the decorative paper in proportion to the sales they expect as shoppers buy it later in the season to wrap their gifts. "So far, so good," Appert said. "The rate of change in gift wrap captures 98 percent of the variability in nondurable retail sales." Translation: Appert's index has a fairly impressive track record in predicting the magnitude and direction of holiday retail sales. Continued ...
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