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Dive Brief:
Holiday sales in the U.S. are expected to increase between 2.9% and 3.4% this coming season, according to a Deloitte forecast.
Deloitte projects holiday sales from November through January will total between $1.61 trillion and $1.62 trillion, up from $1.57 trillion last season, as recorded by the U.S. Census Bureau.
E-commerce holiday sales growth will continue at a clip of between 7% and 9%, similar to the previous year. Total e-commerce sales are projected to reach between $305 billion and $310.7 billion, up from $285 billion in the 2024 season.
Dive Insight:
While inflation may cause consumers to buy fewer goods, a projected increase in personal income will help offset the discrepancy, according to the Deloitte report.
“We anticipate disposable personal income (DPI), a key driver of retail sales, to grow between 3.1% to 5.4% this holiday season. Our research indicates that DPI is a sound predictor of retail sales and e-commerce sales,” Akrur Barua, a Deloitte economist, said in a statement. “While elevated inflation will likely weigh on the volume of retail sales growth, it will nevertheless be a tailwind for the dollar value spent on retail purchases in the holiday season.”
Recent reports suggest that while prices continue to increase, it won’t deter consumers from making purchases, although overall volume may be modest. Research from Inmar Intelligence suggests that consumers may cut back on groceries and other essential items in order to cover holiday expenses. Consumers are also utilizing AI more this season as a way to find the best deals for their holiday purchases, according to a recent Klaviyo report.
“Inflation is potentially a headwind and a tailwind this holiday season,” Brian McCarthy, principal of retail strategy at Deloitte, said in an email. “As prices rise, the nominal value of retail sales may increase even if the actual volume of goods sold remains stable or grows modestly. This means that higher prices can contribute to stronger sales figures. Inflation, however, may also limit consumers’ purchasing power and hence, affect overall demand.”
Deloitte’s holiday forecast comes as consumer sentiment dipped in August amid the rising cost of goods and broader economic uncertainty.