The holiday season is expected to be a good one this year as retail sales are likely to increase between 4.5 and 5% in 2019, according to Deloitte’s annual holiday retail forecast.
Retail sales between November 2018 and January 2019 (seasonally adjusted and excluding automotive and gasoline) grew 3.1%.
Overall, Deloitte projects that holiday sales will exceed $1.1 trillion during the November–January timeframe.
Deloitte also forecasts that e-commerce sales will grow by 14–18%, year-over-year, during the 2019–2020 holiday season, compared to sales increasing by 11.2% in 2018. The robust growth will likely result in e-commerce holiday sales reaching between $144–149 billion this season.
“The projected holiday season growth is, in part, due to the current health of the labor market. Near record-low unemployment rates, coupled with continued monthly job creation, may encourage people to spend more during the holiday season,” says Daniel Bachman, Deloitte’s U.S. economic forecaster.
“The economy is still growing, albeit at a slower rate,” Bachman adds. “Additionally, we continue to see consumer confidence elevated, which also helps boost holiday spending.”
Bachman noted that the 2019 holiday season increase reflects expectations for consistent growth throughout the season. However, because last year’s holiday sales came in lower than expected in December, the 2019 forecast predicts a strong growth rate in comparison to 2018’s more modest growth. Last December, the government shutdown, uptick in consumer savings and a sharp stock market decline may have led to the lower growth season.
“Based on growth in consumer disposable income and spending indicators, retailers, across channels, should expect a strong holiday season in 2019,” says Rod Sides, Deloitte's U.S. retail and distribution sector leader.
“We’ve seen retailers continue to improve customer experience, invest in the fundamentals and leverage relationships with innovative startups to boost engagement and efficiency,” Sides adds. “But, convenience is the new retail currency; retailers who offer seamless experiences, have products available and can deliver items more quickly than ever are most likely to win this holiday season.”