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‘Sluggish’ sales expected for holidays

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NEW YORK — Retailers can expect a low-single-digit increase in holiday season sales, according to a slew of preseason forecasts.

Citing “continued consumer resilience,” the authors of the Mastercard SpendingPulse foresee a 3.7% increase in spending compared with a year ago.

Deloitte’s annual holiday retail forecast pegs the increased spending at between 3.4% and 4.6%.

Coresight Research anticipates an increase in the low single digits, and Bain & Co. forecasts U.S. retail sales to increase 3% this holiday season, noting that would be the lowest holiday growth rate since 2018.

“However, adjusting for inflation, real U.S. holiday retail sales growth will be sluggish, at just 1%, well below the 10-year average and the lowest real sales growth since the financial crisis,” Bain said last month in releasing its forecast.

Marshal Cohen, chief retail analyst with Circana, said in August that consumers seemed to be in no rush to spend, and cited a lack of inspiration — with few new and exciting items — that could make for a “ho-hum holiday at retail.”

Cohen said the 2023 holiday shopping period could mirror 2022, “with a small early start in late October, a lackluster Cyber Monday and an OK Black Friday, and a long delay after until the last two weeks leading up to the holiday.”

Amazon didn’t release a sales forecast but did announce it will hire 250,000 people for holiday season jobs, up from 100,000 last year. Amazon noted that it has opened more than 50 fulfillment centers, delivery stations and same-day delivery sites in the United States this year.

After years of inventory and spending habits being in flux, the 2023 season will bring a broader rebalancing across categories, channels and sectors in alignment with macroeconomic trends, according to the Mastercard SpendingPulse report. While digital shopping habits became the new normal during the pandemic, this season’s shopper is looking to make purchases anytime, anywhere, with e-commerce expected to increase 6.7% from last year and in-store sales to increase 2.9%, the report said.

Deloitte also forecasts an increase in online sales, with an anticipated bump of between 10.3% and 12.8% from last year.

“We expect healthy employment and income growth to keep the volume of sales growing for the 2023 holiday season,” said Daniel Bachman, Deloitte’s U.S. economic forecaster. “Inflation, which accounted for much of the increase in the value of retail sales last year, should moderate. This means the total value of retail sales will grow more slowly than last year. Our forecast also reflects a decreasing pool of pandemic-era savings, both of which will weigh on retail sales and are reflected in our lower projected growth for the season.”

Consumer data released by Pitney Bowes also suggest that shoppers will buy more online this holiday season than they did last year. “While U.S. consumers grapple with economic challenges, including the lingering impacts of inflation, their discretionary spending, particularly online, appears to defy gravity headed into the holidays,” said Vijay Ramachandran, the company’s vice president of go-to-market enablement and experience. “Online sales so far this year are up more than 7% versus 2022, even though online prices have been on a deflationary trend for more than a year.”

Pitney Bowes found that about half of those planning to spend less online are also cutting back on overall or non-holiday purchases. But that’s down from the 71% who said last year they would be spending less for holiday and non-holiday purchases, which the company said is an indicator that U.S. consumers are holding up better than might be expected in 2023.


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