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NEW YORK — Retailers in the United States should see an increase in holiday sales of between 3.5% and 4%, according to Deloitte’s annual holiday sales forecast. That compares to last year’s 5.2% growth rate, Deloitte noted late last month.
Retailers in the United States should see an increase in holiday sales of between 3.5% and 4%, according to Deloitte’s annual holiday sales forecast. That compares to last year’s 5.2% growth rate, Deloitte noted late last month.
Deloitte’s holiday forecast (which excludes motor vehicles and gasoline) includes the month of January to account for purchases made with gift cards. Sales from gift cards represent roughly $30 million in consumer spending each holiday season but are not included in companies’ results until the cards are redeemed.
"While retail holiday sales are expected to rise, the increase may be smaller than last year due to the lingering effects of flat personal income growth in the first quarter," remarked Daniel Bachman, Deloitte’s senior U.S. economist.
But consumer sentiment picked up later in the year, noted Bachman, who cited an improving labor market, increasing home values and relatively favorable gasoline prices as reasons for the rise in optimism.
"Housing and employment tend to create a more meaningful wealth effect than that of the financial markets, so the recent stock market fluctuations and instability overseas should not have a marked impact on shoppers’ holiday spending intentions," he observed.
Deloitte forecasts an increase of 8.5% to 9% in sales in the online and mail-order channels during the holiday season.
"Online sales continue to be a growth channel, but more importantly, we’ve passed the tipping point, where online and mobile engagement play a greater role generating sales in the physical store — where more than 90% of retail sales occur — than in digital channels alone," pointed out Rod Sides, a Deloitte vice chairman and the leader of the firm’s retail and distribution sector.
Deloitte forecasts that digital interactions will influence 64% of holiday retail store sales, reflecting the impact on brick-and-mortar sales of shoppers’ use of digital devices.
Deloitte’s holiday forecast is more bullish than one from consulting firm AlixPartners, which said that it expects holiday sales to increase at a rate of between 2.8% and 3.4% during the November-December shopping period. That compares to last year’s 4.4% increase, the firm noted.
The Southfield, Mich.-based firm looked at recent consumer spending trends to make its forecast. A proprietary model it has used since 2012 has determined that about 66% of annual retail sales occur through August, excluding spending on motor vehicles, food service, dining and gasoline.
"What we are seeing is that consumers’ behavior this year in terms of increased retail sales is fairly muted," commented Noam Paransky, director of AlixPartners’ retail practice.
Shipping companies are preparing for online buying that’s comparable to last year, Bloomberg News reported. United Parcel Service Inc. said it will hire about 95,000 seasonal workers, the same as last year. Retailers are also preparing for a season with slower growth in seasonal hires.
Walmart and Target Corp. plan to hire the same number of seasonal workers as last year, and others, including Macy’s Inc., said they plan to add slightly fewer temporary employees this year.
Walmart moved up the start of its holiday layaway program by two weeks this year in a bid to get a jump on holiday demand. From August 28, the retailer was making 40,000 items available under the payment plan, roughly 20% more than last year.
Like many retailers, Walmart is banking on toys this year, especially Star Wars merchandise ahead of the December 18 release of Star Wars: The Force Awakens — the first in a new Star Wars trilogy being produced by Walt Disney Co.
Walmart rolled out 500 new Star Wars products to stores on September 4, and it has made thousands more items, including apparel, grocery and health products, available online.
Target said its stores will feature a dedicated display that compiles everything Star Wars in one place. The retailer was featuring life-size Chewbacca cardboard cutouts that growl when guests walk past them in stores.
Toy makers get about 70% of their sales in the last two months of the year.
Investment firm Piper Jaffray estimated that sales of Star Wars merchandise will generate $3 billion this year. Retailers are hoping that sales will be spread among a broader customer base, as the latest installment draws a new generation of children and teens into the Star Wars realm.