Dive Brief:
- Retail sales during this year’s holiday season are forecast to increase between 2.3% and 3.3% from last year, according to a Deloitte report released Thursday.
- Between November and January, consumers are projected to drive between $1.58 trillion to $1.59 trillion in retail sales, Deloitte predicts.
- E-commerce sales are expected to grow between 7% and 9% year over year during the upcoming holiday season, generating between $289 billion and $294 billion in online sales, per the report.
Dive Insight:
Deloitte’s sales growth forecast for this year’s holiday season indicates a slowdown from last year. In 2023, the firm predicted that retail sales would rise between 3.5% and 4.6% compared to the previous year, pushing holiday retail sales to between $1.54 trillion and $1.56 trillion.
Various broader economic factors continue to weigh on consumers’ budgets. Though inflation has slowed, its lingering impact along with rising credit card debt and declining savings will “likely weigh on sales growth this season compared to the previous one,” Akrur Barua, an economist at Deloitte Insights, said in a statement.
In August, the Consumer Price Index rose 2.5% year over year, according to the Bureau of Labor Statistics figures released this week. Meanwhile, U.S. credit card debt rose $27 billion in Q2 to $1.14 trillion, according to figures from the Federal Reserve Bank of New York’s Center for Microeconomic Data.
Echoing Barua’s sentiment, other research suggests that consumers are pulling back their spending this year. A third of respondents to a recent Bankrate survey said they plan to spend less this holiday season than last year due to inflation and high interest rates. Less than a quarter said they planned to spend more.
In addition to Deloitte’s findings, other research indicates that shoppers, particularly Gen Z consumers, are using their mobile devices to shop for holiday gifts this year. More than half (53%) of online shopping during this year’s holiday season is projected to occur on mobile devices, according to an Adobe Analytics report. Plus, a recent EMarketer report based on Basis Technologies and GWI research found that 42% of Gen Z shoppers said they’re likely to purchase their holiday gifts through social media platforms, a greater proportion than millennials (26%), Gen Xers (15%) and baby boomers (6%) who said the same.
“Our forecast indicates that e-commerce sales will remain strong as consumers continue to take advantage of online deals to maximize their spending,” Michael Jeschke, principal of Deloitte Consulting and retail and consumer products leader, said in a statement. “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.”
