NEW YORK — Retail sales may increase as much as 4 percent this holiday season, less than last year’s gain, as shoppers’ wages remain stagnant, according to Deloitte LLP.
Sales, excluding purchases of motor vehicles and gas, may climb to between $961 billion to $965 billion in the November- through-January shopping season, Deloitte said Wednesday. Holiday sales by that measure rose 5.2 percent last year, according to the New York consulting firm.
U.S. shoppers may be cautious with their disposable income this year, restrained by average hourly earnings that the Labor Department said climbed just 2.2 percent in August from the year before. Slowing global growth and financial-market volatility also may shake consumers’ willingness to spend, despite benefits from higher employment rates, better home values and lower gas prices. Several retailers have responded by keeping seasonal hiring flat or slightly below last year’s levels.
“Personal wealth was really flat at the beginning of the year, so we think that’s going to moderate the sales,” said Rod Sides, vice chairman of Deloitte. “That’s what’s leading to some of the conservatism. That’s what’s factoring into the decision to hold down hiring.”
Deloitte’s forecast is rosier than a projection from research firm ShopperTrak, which said last week that sales in November and December may rise as much as 2.4 percent, driven by an early Hanukkah and a more informed consumer. That increase is less than the 4.6 percent jump in spending the Chicago-based firm reported last year, the biggest gain since 2005.
AlixPartners also expects holiday sales growth to be sluggish this year, increasing 2.8 percent to 3.4 percent. That gain is “on the low end” of holiday sales since 2010, the consulting firm said in a statement Wednesday.
Online and mail-order sales may rise as much as 9 percent, Deloitte said. That’s below last year’s 12 percent gain and the smallest increase since 2013, when non-store sales grew 6.2 percent. Still, digital interactions will influence 64 percent, or $434 billion, of retail store sales this season, meaning customers will research products online before buying in person.
“Everyone is trying to customize and cater to individual needs by finding a way to link the online experience with the physical store purchase,” Sides said. “The notion of different channels is going away a little because we expect to be able to buy what we want, where we want, when we want.”
Shipping companies are preparing for online buying that’s comparable to last year. United Parcel Service Inc. said last week it will hire about 95,000 seasonal workers, the same as in 2014. That figure is based on “initial volume forecasts from customers,” for the period from November through January, the company said.
Retailers are also preparing for a season with slower growth. Target Corp. and Wal-Mart Stores Inc. have said they plan to hire the same number of seasonal workers as last year at 70,000 and 60,000, respectively. Toys “R” Us Inc. plans to add 5,000 fewer temporary employees than last year at 45,000, and Macy’s Inc. will reduce its number of seasonal workers to 85,000, about 1,000 fewer than last year.
For retailers to see growth this holiday season, they need to have the right products at the right prices and offer consumers a compelling experience across mobile, Web and store channels, Sides said.
“Finding a really differentiated, winning strategy is really tough,” he said.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
