US holiday sales are forecast to grow at the slowest pace since 2018, according to a new survey, amid fears that persistent inflation could wipe out consumers' savings.
Retail sales are forecast to rise 2.3% to 3.3% during the holiday season, reaching a total of $1.6 trillion between November and January. According to Deloitte's annual holiday retail forecast,
That's down sharply from last year, when retail sales rose 4.3% during the same period to a total of $1.5 trillion, according to the U.S. Census Bureau.
“Rising credit card debt and the possibility of many consumers exhausting pandemic-era savings will weigh on sales growth this season compared to last year,” Akrur Barua, economist at Deloitte Insights, said in a statement.
The forecast for the upcoming holiday season is in line with the 3.1% sales growth seen in 2018.
E-commerce sales are also expected to be lower than last year's figures, though they will “remain strong as consumers continue to take advantage of online deals to maximize their spending,” Michael Jeschke, head of Deloitte's retail and consumer division, said in a statement.
According to Deloitte, e-retailer sales are forecast to grow 7% to 9% this holiday season, reaching a total of $294 billion, down from last year's 10.1% growth, which totaled $270 billion.
Sales at stores are forecast to rise 1.3% to 2.1% to reach a total of $1.3 trillion, slightly down from last year's 3.1% increase from $1.3 trillion, according to Reuters.
Holiday season sales typically account for more than half of U.S. retailers' annual revenue.
This year, retailers are already facing the added challenge of a shorter holiday shopping season.
With only 27 days between Thanksgiving and Christmas, retailers are being pressured to offer discounts early in the season.
Companies will be seriously hurt as savings-poor consumers reduce their holiday shopping — and all consumers' savings have declined.
The US personal savings rate fell to 3.4% in June from 3.5% in May – making it the lowest monthly rate since June 2022. According to the US Bureau of Economic Analysis,
The personal savings rate fell again to 2.9% in July. According to the BEA,
As a result, consumers are expected to begin looking for deals earlier in the holiday season.
Cash-strapped customers have already adjusted their shopping habits. Value Meals from fast-food restaurants, Groceries at cheap prices from big stores and cheap items from fast-fashion retailers.
post with wires
