Retail

Inflation, supply chain issues to hit US holiday shopping: S&P Global

16 Nov '22

2 min read

Pic: Shutterstock

High inflation and ongoing retail supply chain issues in the United States are casting dark clouds over the important holiday shopping period from October to December. Sales forecasts for the period show the growth of total sales over the prior year will be undercut by soaring inflation, leading to a marked slowdown from recent years, S&P Global said.

Holiday sales growth can make or break the finances of many retailers and serves as a bellwether for the economy as consumer spending accounts for nearly 70 per cent of US gross domestic product (GDP).

Amazon has already warned that inflation and other macroeconomic concerns could negatively affect its holiday sales in the fourth quarter this year. As a growing number of signals point toward a recession, forecasters have taken a somber view of just how robust the season will be, S&P Global said in a note.

S&P Global Market Intelligence economists expect retail sales from October through December to fall by 1.2 per cent compared to the same three months last year, while accounting for inflation.

Consumer price increases reached a 40-year peak over the summer and remained elevated, with October prices rising 7.7 per cent from the prior year, according to Bureau of Labour Statistics data released this month.

Without accounting for inflation, total sales will rise by 4.5 per cent over the 2021 figure, faster growth than before the pandemic.

Fibre2Fashion News Desk (DS)

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