US retail sales will rise by 2.3% to 3.3% year on year this holiday season amid a strong job market and increasing disposable income, Deloitte predicted.
Revenues will total $1.58 trillion to $1.59 trillion from November to January, the professional-services group projected recently. The overall growth rate will slow compared with last year’s 4.3% increase, reflecting the moderation of inflation as well as rising credit card debt.
“Although the pace of increase in holiday sales will be slower than last year, we expect that healthy growth in disposable personal income (DPI), combined with a steady labor market, will support a solid holiday sales season,” said Deloitte Insights economist Akrur Barua. “Meanwhile, inflation is both a headwind and a tailwind to holiday sales. While declining inflation aids consumers’ purchasing power, it also is expected to negatively impact the nominal rise in the dollar value of sales. In addition, rising credit card debt and the possibility that many consumers have exhausted their pandemic-era savings will likely weigh on sales growth this season compared to the previous one.”
Much of this year’s sales will also be driven by increased online spending, Deloitte noted. E-commerce sales will climb 7% to 9% year on year to between $289 billion and $294 billion.
Meanwhile, Mastercard believes spending for the November 1 to December 24 period will rise 3.2% year on year, it said last week. When it comes to jewelry, Millennials and Gen Zs are choosing new popular brands that are less expensive than the more traditional brands purchased in the past, the company noted. While total outlay on the newer labels is set to grow 9%, the average transaction value will fall 4% to $116, from $121 a year ago.
“Following a sharp rise in spending post-pandemic, this season’s retail sales are expected to moderately increase in line with trends over the past decade,” said Michael Jeschke, a principal at Deloitte Consulting and leader for retail and consumer products. “Our forecast indicates that e-commerce sales will remain strong as consumers continue to take advantage of online deals to maximize their spending. While this holiday season reflects a return to trend levels of growth, retailers who focus on building loyalty and trust with consumers could be well-positioned for success.”
Image: A man shopping for holiday gifts. (Shutterstock)
Stay up to date by signing up for our diamond and jewelry industry news and analysis.
