Deloitte forecasts slower holiday sales growth
Retailers can expect moderate sales growth this holiday season.
Holiday retail sales are likely to increase between 2.3% and 3.3% between November and January, according to Deloitte's annual holiday retail forecast. That compares to a 4.3% increase during the same period last year.
Overall, Deloitte projects sales will total $1.58 trillion to $1.59 trillion during the November to January holiday time period. (Retail sales between November 2023 and January 2024, excluding automotive and gasoline, totaled $1.54 trillion, according to the U.S. Census Bureau.)
E-commerce is expected to be a key driver of overall holiday sales growth. Deloitte forecasts e-commerce will likely grow between 7% and 9% year-over-year to between $289 billion and $294 billion.
"Although the pace of increase in holiday sales will be slower than last year, we expect that healthy growth in disposable personal income, combined with a steady labor market, will support a solid holiday sales season," said Akur Barua, economist, Deloitte Insights. "Meanwhile, inflation is both a headwind and tailwind to holiday sales. While declining inflation aids consumers' purchasing power, it also is expected to negatively impact the nominal rise in the dollar value of sales. “
In addition, rising credit card debt and the possibility that many consumers have exhausted their pandemic-era savings will likely weigh on sales growth this season compared to the previous one, Barua added.
Retailers will also be challenged by a shorter holiday season this year, with only 27 days between Thanksgiving and Christmas.
Following a sharp rise in spending post-pandemic, Deloitte said holiday sales sales are expected to moderately increase in line with trends over the past decade.
"Our forecast indicates that e-commerce sales will remain strong as consumers continue to take advantage of online deals to maximize their spending,” said Michael Jeschke, principal, Deloitte Consulting LLP, and retail & consumer products leader. While this holiday season reflects a return to trend levels of growth, retailers who focus on building loyalty and trust with consumers could be well positioned for success."
