Despite lower numbers, growth will still remain above the 10-year average.
Holiday sales in November and December are predicted to increase a solid 3.7 percent to $630.5 billion, according to the National Retail Federation outlook. While those numbers represent a slowdown, they are still significantly higher than the 10-year average of 2.5 percent.
Holiday sales are anticipated to comprise approximately 19 percent of the overall retail industry’s annual sales of $3.2 trillion, with online sales predicted to increase between 6 and 8 percent, to $105 billion.
“With several months of solid retail sales behind us, we’re heading into the all-important holiday season fully expecting to see healthy growth,” said NRF President and CEO Matthew Shay.
“However, while economic indicators have improved in several areas, Americans remain somewhat torn between their desire and their ability to spend; the fact remains consumers still have the weight of the economy on their minds, further explaining the complex retail spending environment we are seeing right now. We expect families to spend prudently and deliberately, though still less constrained than what we saw even two years ago
Yet despite the positive numbers, 2015 holiday retail sales will likely miss last year’s 4.1 percent growth.
“Potential disruptions from yet another government shutdown in mid-December and a slower pace of job creation and income growth are just a few key factors that will impact holiday shoppers’ spending this year,” continued Shay.
“Price, value and even timing will all play a role in how, when, where and why people shop over the holiday season. Retailers will be competitive not only on price, but on digital initiatives, store hours, product offerings and much more.”
The study suggests that American consumers are holding on to their hard-earned dollars more tightly, preferring to spend their money on experiences or services rather than consumer goods. The study also demonstrated that lower- and middle-income consumers are not feeling the urge to spend, despite the economic recovery.
A recent estimate by Deloitte predicted that 2015 holiday store sales could rise 4 percent, while AlixPartners anticipated growth in a range between 2.8 percent and 3.4 percent, asserting that the this year could see the weakest holiday shopping season since the recession.
NRF Chief Economist Jack Kleinhenz has faith in the economy and the strength of the consumer this year. “Consumers have shifted some of their demand toward services and away from goods,” Kleinhenz told Bloomberg. “Consumers are buying things—there’s no doubt about it. They’re spending money on autos, on big-ticket items, and we’ve seen a big pickup in restaurants and personal services.”
