RAPAPORT... US retail sales are forecast to increase by up to 1.5% this holiday season, despite uncertain consumer sentiment and a jump in the unemployment rate, Deloitte said Tuesday.
The consulting firm expects overall holiday retail sales to rise 1% to 1.5% for the November-to-January period, to about $1.15 trillion, it said. That growth is a slowdown from the same time last year, when holiday sales increased 4.1%, according to the US Census Bureau.
“The lower projected holiday growth this season is not surprising given the state of the overall economy,” said Daniel Bachman, Deloitte’s US economic forecaster. “While high unemployment and economic anxiety will weigh on overall retail sales this holiday season, reduced spending on pandemic-sensitive services such as restaurants and travel may help bolster retail holiday sales somewhat.”
The bulk of growth will come from online sales, Deloitte noted. E-commerce revenues will soar between 25% and 35% year on year during the 2020-21 holiday season, compared to an increase of 15% in 2019, the company predicted. This transformation is set to result in $182 billion to $196 billion in e-commerce sales over the season.
“E-commerce is likely to be a big winner, because consumers have shown a clear movement towards buying online rather than at brick-and-mortar stores,” Bachman continued.
The level of spending for the upcoming holiday season still depends on how the pandemic plays out over the next few months, Deloitte warned. In one scenario, sales will grow up to 1% as consumer anxiety over finances and health continues to mount. Alternatively, sales could rise 2.5% to 3.5% as consumer confidence steadily increases, given a possible federal relief bill, unemployment insurance benefit supplements, or the release of an effective vaccine. The forecast of a rise of 1% to 1.5% is a melding of both scenarios, the consulting firm said.
“Regardless of the scenario, however, the consumer’s focus on health, financial concerns and safety will result in a shift in the way they spend their holiday budget,” added Rod Sides, vice chairman of Deloitte and US retail and distribution sector leader. “For retailers, this holiday season will continue to push the boundaries on the importance of online, convenience, the role of the store, and the criticalness of safe and speedy fulfillment.”
Image: Holiday gifts. (Shutterstock)
|
|
|
|
|