‘Tis the Season for a Holiday Sales Forecast

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Yuletide retail sales are expected to grow modestly, according to Deloitte.

Holiday retail sales this year likely will increase between 4% and 6%, according to Deloitte’s annual holiday retail forecast. In 2021, holiday sales grew by 15.1% from November to January, according to Deloitte Touche Tohmatsu Ltd., a London-based professional services network.

Deloitte’s retail and consumer products practice estimate holiday sales will total between $1.45 trillion and $1.47 trillion during the same period. 

Deloitte also forecasts e-commerce sales will grow by 12.8% to 14.3%, year over year, during the 2022 holiday season. This likely will result in e-commerce holiday sales reaching between $260 billion and $264 billion this season.

On the other hand . . . Consumers remain worried about high inflation and Federal Reserve interest rate hikes intended to bring inflation under control, but neither has stopped them from spending, says Jack Kleinhenz, chief economist of the Washington, D.C.-based National Retail Federation. “The economic situation in the United States is unsettling,” Kleinhenz says. “Consumer confidence is down, consumer spending’s rate of growth has slowed, and economists and consumers alike are worried about the possibility of a recession, all reflecting persistently high inflation and rising interest rates. Nonetheless, spending continues to grow, and many economists say a recession — if there is one — will likely be mild.”

“The lower projected growth for the 2022 holiday season reflects the slowdown in the economy this year,” says Daniel Bachman, Deloitte’s U.S. economic forecaster. “Retail sales are likely to be further affected by declining demand for durable consumer goods, which had been the centerpiece of pandemic spending. 

“However, we anticipate more spending on consumer services, such as restaurants, as the effects of the pandemic continue to wane. Inflation will also help to raise dollar sales, although retailers will see less growth in sales volume.”

As inflation weighs on consumer demand, consumers could shift how they spend their holiday dollars. “Retail sales are set to increase as a result of higher prices, and this dynamic has the potential to further drive e-commerce sales as consumers look for online deals to maximize their spending,” says adds Nick Handrinos, vice chair, Deloitte LLP and leader of U.S. retail, wholesale and distribution, and consumer products. “Retailers across channels who remain aligned with consumer demand and offer convenient and affordable options can be well-positioned for success this season.”