The National Retail Federation (NRF) is projecting a $630.5 billion bounty for merchants this holiday season — a 3.7 percent increase over last year when seasonal sales rose 4.1 percent.
Contributing to the slower growth rate are slackening job growth, deflationary retail prices, and a shift in consumer spending toward services, the trade group said.
But if this year’s percentage sounds paltry it’s not: NRF said the projected gain is still “significantly higher” than the 10-year average of 2.5 percent.
Even more significant will be the increase in online sales, which NRF is forecasting will grow between 6 and 8 percent, to $105 billion, or nearly 17 percent of all holiday sales.
According to NRF president/CEO Matthew Shay, price, value and even timing will all play a role in how, when, where and why people shop over the holiday season, with retailers competing not only on price, but on digital initiatives, store hours, product offerings and other lures.
“With several months of solid retail sales behind us, we’re heading into the all-important holiday season fully expecting to see healthy growth,” he noted. “However, while economic indicators have improved in several areas, Americans remain somewhat torn between their desire and their ability to spend; the fact remains consumers still have the weight of the economy on their minds, further explaining the complex retail spending environment we are seeing right now. We expect families to spend prudently and deliberately, though still less constrained than what we saw even two years ago.”