Deloitte: Holiday sales set to increase
STAMFORD — Retail holiday sales in the U.S. should increase 4 percent to 4.5 percent over last year’s shopping season, according to a new report by professional-services firm Deloitte.
Sales are expected to reach $1.04 trillion to $1.05 trillion between November and January, Deloitte forecasts.
The report points to accelerating growth in the retail sector. In each of the previous two years, revenues increased by 3.6 percent.
Retailers would benefit from high consumer confidence, a strong labor market and low and stable personal savings, Deloitte officials said. At the same time, they said retailers would need unique offerings to compete in a market where customers have a vast array of options.
“I believe it will be a very strong season,” Rod Sides, vice chairman of Deloitte’s retail and wholesale distribution practice, said in an interview. “The way people shop is changing, but retail as an industry continues to grow.”
Reflecting the shifting landscape, Deloitte forecasts an 18 percent to 21 percent increase this year in e-commerce sales compared with the 2016 total. E-commerce sales are expected to run between $111 billion and $114 billion during the upcoming holiday season.
“What we found with e-commerce is the No. 1 thing it drives is convenience,” Sides said. “It puts power in the hands of the consumers. They’re still willing to buy, but the reason why we’re seeing a lot of store closures is they aren’t going to the stores as much. They’re having it delivered.”
Strong consumer finances underpin the growth. Last year, U.S. disposable personal income in the holiday season grew 2 percent over the 2015 holiday period. The increase could run between 3.8 percent and 4.2 percent this year, according to Deloitte.
Amid the generally auspicious outlook, Deloitte officials cautioned that the retail market could still run into obstacles. An increase in the savings rate, for instance, could crimp spending. The threat of a government debt ceiling crisis — which has loomed over previous holiday seasons — could also diminish employment and income growth.
The impact of the exceptionally active Atlantic hurricane season remains too early to project, Deloitte officials said.
Deloitte — which has about 1,100 Stamford-based employees — gives a sanguine prognosis for the industry’s long-term prospects.
“We’re expecting to see continued growth take place,” Sides said.
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