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US holiday sales to grow between 3.8% and 4.2%: NRF

07
Oct '19
Pic: Shutterstock
Pic: Shutterstock
The US National Retail Federation (NRF) expects holiday retail sales during November-December to increase by 3.8-4.2 per cent over 2018 figures to a total of between $727.9 billion and $730.7 billion. The numbers, which exclude automobile dealers, gasoline stations and restaurants, compare with an average holiday sales rise of 3.7 per cent over the last five years.

“The U.S. economy is continuing to grow and consumer spending is still the primary engine behind that growth,” NRF president and chief executive officer Matthew Shay said in a release.

“Nonetheless, there has clearly been a slowdown brought on by considerable uncertainty around issues including trade, interest rates, global risk factors and political rhetoric. Consumers are in good financial shape and retailers expect a strong holiday season. However, confidence could be eroded by continued deterioration of these and other variables,” he said.

“There are probably very few precedents for this uncertain macroeconomic environment,” NRF chief economist Jack Kleinhenz said.

NRF expects online and other non-store sales, which are included in the total, to increase between 11 per cent and 14 per cent to between $162.6 billion and $166.9 billion, up from $146.5 billion last year.

The effect of tariffs on holiday spending—either directly or through consumer confidence—remains to be seen. Some holiday merchandise—including apparel, footwear and televisions—is subject to new tariffs that took effect September 1, and other products will have the tariffs applied on December 15.

Retailers are using a myriad of mitigation tactics to limit the impact on consumers, and the impact will ultimately vary by company and product. Small businesses, in particular, have already been forced to raise prices. Nonetheless, 79 per cent of consumers surveyed for NRF in September were concerned that tariffs will cause prices to rise, potentially affecting their approach to shopping.

Holiday sales during 2018 totalled $701.2 billion, an unusually small increase of 2.1 per cent over the year before amid a government shutdown, stock market volatility, tariffs and other issues.

Even with trade uncertainty and the increasingly tight labour market, retailers have been hiring extra staff to meet expected demand during the holiday season. NRF expects retailers to hire between 530,000 and 590,000 temporary workers, compared to 554,000 in 2018.

Fibre2Fashion News Desk (DS)


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