As the holiday shopping season approaches, recent insights reveal a cautiously optimistic outlook for retail sales growth in the United States. According to the National Retail Federation (NRF), retail sales during the November-December holiday season are projected to increase by 2.5% to 3.5%, totaling between $979.5 billion and $989 billion. This forecast comes despite mixed economic signals, including a modest job growth of only 12,000 in October and a slowdown in GDP growth from 3% in Q2 to 2.8% in Q3. Jack Kleinhenz, NRF's Chief Economist, expresses optimism about the holiday season, although he notes that it is too early to assess the potential impact of upcoming election results on the economy. [dfde5782]
A recent survey by Morgan Stanley indicates that 35% of consumers plan to spend more on holidays this year, reflecting a shift in consumer sentiment. Bank of America reports that average holiday spending intentions have reached $2,100, marking a 7% increase year-over-year. Additionally, the Conference Board projects average spending of $1,063, up 7.9% from 2023. Deloitte predicts an even more substantial increase, estimating an 8% rise to $1,778 per shopper. [8e3202a5]
A survey by McKinsey's ConsumerWise, conducted in August 2024, indicates a notable increase in shopper optimism among U.S. consumers, particularly among younger demographics. This optimism contrasts with the cautious spending habits that many consumers are adopting due to inflation and economic pressures. Retailers are preparing for a busy holiday season, with expectations that key shopping days like Black Friday and Super Saturday will be among the busiest. [13b92e5d]
Tony D'Onofrio from Loss Prevention Magazine highlights the significance of the holiday shopping season, noting that consumer spending accounts for roughly 70% of U.S. GDP. Historically, holiday sales in November and December average 19% of total annual retail sales. In 2023, U.S. retailers hired between 345,000 to 450,000 seasonal workers, with small retail businesses relying heavily on holiday sales for their annual revenue. Predictions for 2024 suggest a lower retail sales growth rate, with Bain & Company estimating a 3% increase, which is below the ten-year average of 5.2%. [80f46e25]
Despite concerns about job security and rising prices, shoppers are still inclined to purchase brand-name items and quality gifts, indicating a desire to maintain traditional holiday spending patterns. The survey also notes that gift cards are likely to be a popular choice this season, as consumers look to optimize their budgets while indulging in holiday spending. With U.S. consumers currently holding $1.142 trillion in credit card debt, retailers are encouraged to offer promotions and deals to attract these cautious yet optimistic shoppers. Overall, the winter holiday shopping season presents an opportunity for brands to drive revenue while addressing the evolving needs and preferences of consumers. [13b92e5d][80f46e25]
Furthermore, Experian found that 89% of consumers are tempted to overspend this holiday season, highlighting the tension between consumer optimism and financial caution. Wells Fargo forecasts a modest 3.3% rise in holiday sales, while KPMG anticipates a 4% increase in spending to $948 per person. Despite inflation concerns, the overall sentiment remains positive, with October retail sales hitting a record $718.9 billion, and wage growth outpacing inflation for the past 18 months. [8e3202a5]