Dive Brief:
- Echoing other holiday sales growth predictions, Forrester projects U.S. retail sales will increase 3.7% year over year to $1 trillion this holiday season, per a new report. This year’s holiday sales growth rate is lower than the past four years but higher than the average growth rate before the COVID-19 pandemic.
- Online retail sales in the U.S. will jump 10.1% year over year to $257 billion, growing at a faster pace than the previous two years but slower than pre-pandemic growth rate averages. Online sales will comprise about 26% of overall U.S. holiday retail sales, the report said.
- As for in-store sales, Forrester predicts that they will see a 1.7% bump from the previous year to $744 billion. This marks the continuation of a slowing growth trend for in-store holiday sales.
Dive Insight:
Though many reports predict sales growth this holiday season, some consumers are poised to spend more than others, according to Forrester.
Forrester’s research notes that wealthier consumers are likely driving retail sales increases thanks in part to their housing value and stock growth. Such gains have been out of reach for blue-collar workers who have seen modest real wage growth. Still, government spending on infrastructure and social programs has helped give U.S. consumers spending power in a mixed economic environment, the report said.
Expressing a similar sentiment to Forrester’s report, the National Retail Federation predicts that U.S. holiday retail sales will increase between 2.5% and 3.5% compared to last year. Though President-elect Donald Trump could impose tariffs that may increase prices in the new year, the latest economic indicators signal a positive holiday outlook this year, NRF Chief Economist Jack Kleinhenz said. Like the NRF, Deloitte also predicts that retail sales will reach between $1.58 trillion and $1.59 trillion during this year’s holiday season, growing between 2.3% and 3.3% year-over-year.
As to where consumers are shopping, other reports indicate that consumers will spend a greater proportion of their holiday budgets online this year. A recent Bain & Company survey found that 76% of U.S. shoppers expect to buy at least half of their holiday items online. Like Forrester's report, Bain & Company noted consumers are struggling financially, with 31% of respondents saying that they couldn't afford nonessential purchases.
