Anticipated growth of 3.5% in holiday sales, according to Deloitte's forecast
** forecasts a moderate growth of 3.5% to 4.6% for holiday sales this year, compared to the 7.6% increase last year, according to a Deloitte report. This year's holiday sales, from November 2023 to January 2024, are predicted to reach between $1.54 trillion and $1.56 trillion.
E-commerce sales are anticipated to increase between 10.3% and 12.8% year over year, pushing online holiday sales to between $278 billion and $284 billion. As spending on services may cool off, spending on durable goods is expected to remain high, according to Nick Handrinos, vice chair of Deloitte.
Online sales could remain strong during the holiday season as shoppers search for online deals to maximize their tight budgets. "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. The total value of retail sales is expected to grow more slowly than last year due to inflation moderating and a decreasing pool of pandemic-era savings.
Heading into the holiday season, retailers have factors working in their favor such as improving consumer sentiment and the aversion of a UPS strike. However, retailers are waiting to see the impact of inflation and student loan debt repayments resuming. Although inflation appears to be cooling, the Consumer Price Index rose 0.6% in August, driven by the increase in the cost of gas and shelter.
The Supreme Court struck down President Biden's student loan forgiveness plan in June, eliminating the possibility of borrowers shedding up to $20,000 in student debt. Once payments resume this fall, consumers could pay roughly $300 per month in loan repayments, according to an analysis from the consumer data firm Earnest Analytics. GlobalData research predicts that the home goods and clothing categories will take the greatest hit from consumers with less discretionary spending available.
As we move into the holiday season, retailers must navigate the challenges of inflation, student loan repayments, and a cautious consumer base while capitalizing on opportunities for online sales and value-driven purchases.
In the 2024 and 2025 holiday seasons, retail sales are projected to grow to $1.58–1.59 trillion for 2024, indicating resilience despite inflation concerns. Online spending continues to grow, with a 9.6% YoY rise for November 2024, and nonstore retailers saw 4.8% YoY growth in March 2024. Bargain hunters are prioritizing discounts and value-driven purchases, yet consumer sentiment might be influenced by deal fatigue and feeling bombarded by promotions.
When assessing the 2023–2024 holiday season, the economic pressures and trends likely applied similarly, given the progression of consumer behavior into 2024–2025. Retailers must leverage online sales and innovative strategies to cultivate long-term customer relationships, as lingering financial pressures could lead to cautious optimism during the holiday season.
- Given the resilience shown in the 2024 and 2025 holiday seasons, retail sales are projected to reach $1.58–1.59 trillion for 2024.
- Online spending continues to grow, with a 9.6% Year-over-Year (YoY) rise for November 2024.
- Sales from nonstore retailers saw a 4.8% YoY growth in March 2024, indicating the enduring appeal of online shopping.
- Bargain hunters prioritize discounts and value-driven purchases during holiday seasons, but may experience deal fatigue and feel overwhelmed by promotions.
- As retailers look ahead to the 2023–2024 holiday season, they must face economic pressures such as inflation and a cautious consumer base.
- To navigate these challenges, retailers must leverage online sales and innovative strategies to cultivate long-term customer relationships.
- Lingering financial pressures could lead to cautious optimism among consumers during holiday seasons, emphasizing the importance of value-driven purchases for retailers.
