Deloitte: Holiday sales expected to increase 3.5% to 4.6%
Retailers can expect some growth this holiday season, but it will be slower than last year amid moderating inflation and a decrease in pandemic-era savings.
That’s according to Deloitte’s annual holiday retail forecast, which expects retail sales will increase 3.5% to 4.6% to total $1.54 to $1.56 trillion during the November to January timeframe in 2023. During the same period in 2022, retail sales grew 7.6% and totaled $1.49 trillion, according to the U.S. Census Bureau.
“We expect healthy employment and income growth to keep the volume of sales growing for the 2023 holiday season,” said Daniel Bachman, Deloitte’s U.S. economic forecaster. “Inflation, which accounted for much of the increase in the value of retail sales last year, should moderate. This means the total value of retail sales will grow more slowly than last year.”
The Deloitte forecast also reflects a decreasing pool of pandemic-era savings, which will weigh on retail sales and is reflected in the firm’s lower projected growth for the season.
On the e-commerce front, Deloitte projects holiday online sales will grow 10.3% to 12.8% year-over-year, reaching between $278 billion and $284 billion this season. E-commerce sales between November 2022 and January 2023 grew 7.9% to $252 billion.
“A sharp rise in spending on services post-pandemic shows signs of leveling off since last year, and compared to pre-pandemic levels, spending on durable goods remains high,” said Nick Handrinos, vice chair, Deloitte LLP, and U.S. retail, wholesale and distribution and consumer products leader. “This season e-commerce sales should continue to be strong as consumers search for the best deals online to maximize their wallets. Retailers who remain flexible to shifting consumer demand and behaviors will likely be poised for growth this holiday season.”
Earlier this month, Bain & Company released its “2023 Holiday Shopping Outlook” study, which forecast that seasonal sales are expected to grow 3.0% year-over-year in November and December. Ajusting for inflation, however, real U.S. holiday retail sales growth will be sluggish at just 1.0%, well below the 10-year average and the lowest real sales growth since the financial crisis.