After strong growth in the first half of the year and more subdued growth in the third quarter, retailers are anticipating the arrival of the all-important holiday season, which accounts for nearly one-quarter (22.83%) of annual retail sales. According to the National Retail Federation (NRF), total holiday retail sales are projected to increase 4.5% over last holiday, bringing holiday spending to $219.9 billion.
“Although consumer spending has been inconsistent in recent months, we expect the holiday season to bring more stability to the industry,” said NRF Chief Economist Rosalind Wells. “Home-related merchandise and consumer electronics should do well this holiday season and trendy fashions should help spark clothing sales.”
One factor affecting holiday sales growth will be tough sales comparisons over last year. Holiday sales growth of 5.1% in 2003 was easy to achieve since sales the year before rose a meager 1.2%. This year, it will be more difficult for retailers to achieve gains since the holiday season last year was solid.
Wells said economic factors affecting holiday sales this year will include higher energy costs, rising interest rates, geopolitical threats and slow income growth.
“Retailers know they will have their work cut out for them this holiday season, but they are up to the challenge,” said NRF President and CEO Tracy Mullin. “Despite economic and geopolitical concerns, consumers continue to set aside money for what is most important to them.”
