Dive Brief:
- As a result of the economic downturn this year, holiday sales are expected to grow between 4% and 6%, reaching $1.45 to $1.47 trillion this season compared to an increase of 15.1% during last year’s period, according to a new forecast from Deloitte.
- Deloitte projects that e-commerce sales will grow by 12.8% to 14.3% to reach between $260 and $264 billion year over year compared to last season’s growth of 8.4%.
- The forecast is attributed to inflationary pressure on consumers, with declining demand for durable goods in contrast to spending patterns throughout the pandemic.
Dive Insight:
Deloitte’s holiday forecast shows consumers are likely to feel the impact of inflation late into this year.
“As inflation weighs on consumer demand, we can expect consumers to continue to shift how they spend their holiday budget this upcoming season,” Nick Handrinos, vice chair of Deloitte LLP, and U.S. retail, wholesale and distribution, and consumer products leader, said in a statement. “Retail sales are set to increase as a result of higher prices, and this dynamic has the potential to further drive e-commerce sales as consumers look for online deals to maximize their spending. Retailers across channels who remain aligned with consumer demand and offer convenient and affordable options can be well positioned for success this season.”
Where consumers are spending less in some categories, other areas will likely see increased sales, according to Deloitte. Consumer services like restaurants are anticipated to see more spending with changing pandemic trends and although sales volume is projected to have less growth, retailers can expect dollar sales to rise due to inflation, Deloitte’s U.S. Economic Forecaster Daniel Bachman said.
Data on how shoppers feel about the upcoming holidays also seem to reflect this projected slowdown. About 59% of survey respondents said they were stressed about holiday spending due to inflation, according to a 4Over survey of 1,004 U.S. consumers last month. The same survey showed that shoppers plan to spend less on gifts this year compared to last, with 73% saying they’re watching their spending more closely in 2022.
Source: Retail Dive
