Total Holiday Spending Seen Rising This Year, Despite Covid-19
Retail sales in the U.S. will actually grow this holiday season, according to new projections from Deloitte.
(Bloomberg) -- Retail sales in the U.S. will actually grow this holiday season, according to new projections from Deloitte, despite ongoing economic uncertainty and higher unemployment brought on by the global pandemic.
Underpinned by e-commerce, spending will increase 1% to 1.5% in the November through January period, Deloitte said in a statement, with the total seen around $1.15 trillion. Growth at that rate would represent a slowdown from last year, which saw sales rise 4.1%, according to the National Retail Federation.
“We just had a lot of fear and uncertainty behind us and I think there’s a chance we’ll spend. I don’t think we’ll spend lavishly but I think we’ll get back to levels that we’ve seen in the past,” Rod Sides, a Deloitte vice chairman, said in an interview.
Retailers are trying to recover from a difficult stretch after the coronavirus pandemic prompted a sudden and dramatic pullback in discretionary purchases. Heading into the critical holiday shopping season, the industry is adopting and expanding contactless buying options to try to persuade consumers to spend again.
Deloitte acknowledges an increased level of uncertainty this year, and it predicts two different scenarios for the holiday season. Consumers may have ongoing anxiety over health, unemployment, school closures or other issues, keeping spending roughly flat from last year, Deloitte said. On the other hand, if there is growing confidence over a return to normalcy, that could push sales up as much as 3.5%. The overall projection is a combination of the two scenarios.
Some consumers may have more money than usual to put toward gifts, Deloitte said, since many are spending less on travel and other experiences.
The spending will be helped by online sales, which are projected to grow as much as 35% this season to almost $200 billion. That’s a bright spot during an otherwise tumultuous time for the industry, Sides said.
“The saving grace -- silver lining, if there is one -- is the resilience that retailers have shown to move their business online,” he said. “Retailers were already headed that direction and if it’s done anything it’s accelerated the change.”
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