A steadily improving economy and relative strength within the retail sector should contribute to a solid holiday selling season, the National Retail Federation (NRF) has forecast.
The trade group is calling for a year-over-year increase of 3.6 to 4 percent in sales for November and December, for a total of $678.8 billion holiday dollars. The tally includes online, kiosk and direct-to-consumer sales, but excludes gasoline and restaurants.
Also contributing to the projected increase: an extra calendar day between Thanksgiving and Dec. 25, and Christmas falling on a Monday, giving procrastinators an extra weekend to complete their rounds.
“Although this year hasn’t been perfect, especially with the recent devastating hurricanes, we believe that a longer shopping season and strong consumer confidence will deliver retailers a strong holiday season,” said NRF president/CEO Mathew Shay.
Indeed, this year’s expected holiday sales growth will either meet or exceed last year’s 3.6 percent gain, and also tops the five-year average of 3.5 percent.
“Consumers continue to do the heavy lifting in supporting our economy, and all the fundamentals are aligned for them to continue doing so during the holidays,” added NRF chief economist Jack Kleinhenz. “The combination of job creation, improved wages, tame inflation and an increase in net worth all provide the capacity and the confidence to spend.”
NRF’s forecast is based on an economic model using several indicators including consumer credit, disposable personal income and previous monthly retail sales.
This year the trade group issued a sales range rather than a fixed percentage due to the unknown impact of the recent tropical storms.