According to the latest Deloitte 2024 Holiday Forecast, consumers are anticipated to spend more this holiday season, despite ongoing inflationary pressures. The forecast projects a moderate increase in retail sales, with growth expected to range between 2.3% and 3.3% from November through January.
Forecast Highlights
Sales Growth: Deloitte’s analysis suggests that this year’s holiday retail sales will likely total between $1.58 trillion and $1.59 trillion. This marks a return to pre-pandemic growth patterns, aligning with trends observed over the past decade. For comparison, retail sales between November 2023 and January 2024 (excluding automotive and gasoline) grew 4.3% and reached $1.49 trillion last year, according to the U.S. Census Bureau.
E-Commerce: Online shopping remains a strong driver of growth, with Deloitte forecasting e-commerce sales to rise between 7.0% and 9.0%, totaling between $289 billion and $294 billion this season. This is a decrease from last year’s 10.1% growth, with e-commerce sales amounting to $252 billion.
Economic Factors
Income and Spending: While disposable personal income has been growing steadily, the rate of increase is slower compared to the previous year. The end of pandemic-era savings and high credit card debt are expected to dampen consumer spending growth. Nonetheless, steady growth in disposable income and a robust labor market are expected to support retail sales.
Consumer Behavior: Shoppers are anticipated to focus on finding deals, leveraging online discounts to maximize their spending. Michael Jeschke of Deloitte Consulting LLP notes that retailers who build loyalty and trust with consumers could gain a competitive edge this season.
Inflation and Purchasing Power: Despite declining inflation impacting the nominal value of retail sales, real wage growth is expected to enhance consumers’ purchasing power. A healthy labor market, relatively low household debt, and a 30% increase in household financial assets since late 2019 are likely to contribute to steady sales growth.
Early Shopping Trends
The holiday shopping season has already begun for many, with nearly 48% of respondents in a recent Bankrate survey indicating that they plan to start their gift shopping by October.
Overall, the forecasted growth reflects a stabilization towards long-term economic trends, with ongoing adjustments due to inflation and shifting consumer habits. Retailers focusing on customer engagement and trust are likely to navigate the season successfully.