US Holiday Sales Projected To Jump As Consumer Jitters Subside
US retail sales are expected to accelerate during this year’s holiday season, a sign consumers will be more comfortable opening their wallets than in the aftermath of 2016’s tumultuous presidential election.
Sales may climb as much as 4.5% to $1.05 trillion in the November-through-January shopping season, according to Deloitte LLP. That would outpace the 3.6% growth in the same period of last year, the New York-based consulting firm said. The seasonally adjusted numbers exclude purchases of motor vehicles and gas.
“The consumer is pretty comfortable,” Rod Sides, vice chairman of Deloitte, said in an interview. “They’re looking to spend a little more than they have in the past.”
Bigger paychecks, higher consumer confidence and a strong labor market are all helping drive the growth, Deloitte found. Disposable income increased just 2% heading into last year’s holiday season, but it’s expected to rise as much as 4.2% this time around, said Daniel Bachman, Deloitte’s senior US economist.
The rosier outlook strikes a different tone than last year, when many retailers blamed the polarising presidential election for keeping shoppers at home. Barnes & Noble Chief Executive Officer Ron Boire said his chain was hit especially hard - and sales didn’t bounce back after the contest was decided in November.
This time around, some retailers are ramping up hiring - a sign they expect a bigger rush of shoppers. Target will add 100,000 seasonal positions for the holidays, 40% more than in 2016.
And while Toys 'R' Us filed for bankruptcy protection this week, it doesn’t have current plans to close any of its 1,600 stores.
But heavy competition - especially from Amazon and other online sellers - will make it harder for conventional chains to attract customers, Sides said. E-commerce sales are expected to swell by 18% to 21% from November to January, compared with last year’s growth rate of 14%.
“We’ll continue to see it take more and more shares from brick and mortar,” he said.