October 7, 2014
Holiday sales are projected to grow at their fastest level in years, rising 4.1% to nearly $617 billion after a 3.1% increase last year.
The bullish seasonal spending forecast follows an uneven sales performance at the beginning of the year and a 3.1% increase during the 2013 season. Online holiday sales are expected to increase between 8% and 11% to as much as $105 billion. Holiday sales on average have grown 2.9% over the past 10 years, including 2014’s estimates, and are expected to represent approximately 19.2% of the retail industry’s annual sales of $3.2 trillion. This would marke the first time since 2011 that holiday sales would increase more than 4 percent.
“Retailers could see a welcome boost in holiday shopping, giving some companies the shot in the arm they need after a volatile first half of the year and an uneventful summer,” said NRF President and CEO Matthew Shay. “While expectations for sales growth are upbeat, it goes without saying there still remains some uneasiness and anxiety among consumers when it comes to their purchase decisions. The lagging economic recovery, though improving, is still top of mind for many Americans.”
“Recognizing the need to keep household budgets in line, we expect shoppers will be extremely price sensitive as they have been for quite some time. Retailers will respond by differentiating themselves and touting price, value and exclusivity,” continued Shay.
While consumer confidence has been unstable much of the year, improvements over the past few months in key economic indicators will give way to increased spending power among holiday shoppers. Retail sales, jobs and housing data all point to healthy gains.
“Though we have only seen consumer income and spending moderately – and erratically – accelerate this year, we believe there is still room for optimism this holiday season,” said NRF Chief Economist Jack Kleinhenz. “In the grand scheme of things, consumers are in a much better place than they were this time last year, and the extra spending power could very well translate into solid holiday sales growth for retailers; however, shoppers will still be deliberate with their purchases, while hunting for hard-to-pass-up bargains.”
Sources: Retailing Today, National Retail Federation
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