Retail industry experiencing surge in holiday sales
Photo: stevepb/pixabay |
By Allen Jones, TEXPERS Communications Manager
Brick-and-mortar and online retailers are expecting holiday
sales this year to increase between 4.3 and 4.8 percent over last year, ringing
up somewhere between $717.45 billion and $720.89 billion October through
December.
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The forecast comes from the National Retail Federation, the
world’s largest retail trade association consisting of department stores,
specialty, discount, catalog, internet, and independent retailers; chain
restaurants and grocery stores. The projection, which excludes automobile,
gasoline and restaurant sales, compares with an average annual increase of 3.9
percent over the last five years.
“Our forecast reflects the overall strength of the industry," says Matthew Shay, president and CEO of the National Retail Federation, in a news
release. “Thanks to a healthy economy and strong consumer
confidence, we believe that this holiday season will continue to reflect the
growth we’ve seen over the past year. While there is concern about the impacts
of an escalating trade war, we are optimistic that the pace of economic activity
will continue to increase through the end of the year.”
The trade association didn’t have any Texas-specific data.
However, the Houston
Chronicle recently reported that the average family in the state’s
largest city is expected to spend $1,512 this holiday season, which is just shy
of the national average of $1,536. The news article’s data comes from a survey
conducted by accounting and consulting firm Deloitte.
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The firm also looked at the Dallas/Fort Worth metropolitan
area and projected that shoppers there would spend about the same as their
national counterparts. Deloitte’s annual holiday economic forecast is a bit
higher nationally than the projection provided by the National Retail
Federation. You can view Deloitte’s full report online.
Although Deloitte’s forecast for the nation is between 5 and
5.6 percent, the bottom line is that holiday sales projections are optimistic.
Both sales estimates also point to strong online sales, with Deloitte reporting
that the internet remains the lead shopping medium with 57 percent of sales
expected to occur online.
Already, Adobe
Analytics is reporting that Black Friday, the day-after-Thanksgiving
retail sales push often regarded as the first day of the traditional Christmas
shopping season, saw online stores alone pull in a record $6.22 billion. This
new high in online Black Friday spending is a 23.6 percent increase from a year
ago. The company, which tracks transaction for 80 of the top 100 internet
retailers in the U.S. like Walmart and Amazon, also reports that this year’s
Friday after Thanksgiving was the first to see shoppers spend more than $2
billion on smartphones.
According to the National Retail Federation, consumers will
focus spending on gifts ($637.67); non-gift holiday items such as food,
decorations, flowers and greeting cards ($215.04); and other non-gift purchases
that take advantage of the deals and promotions throughout the season
($154.53).
Jack Kleinhenz, the chief economist for the retail trade
association, says several factors are behind the optimistic holiday spending
forecasts, including one of the lowest unemployment rates the U.S. has seen in
decades, higher hourly earnings, and increases in net worth.
“When you go across all of those indicators, the landscape
looks very good for the holiday season,” he said during a phone interview with
TEXPERS. “That’s consistent, no doubt, with a very strong economic performance
for the economy.”
Public pension systems make investments on behalf of their
active and retired members. The National Retail Federation doesn’t provide
financial recommendations, but Kleinhenz says retail sales is another critical component
of an overall economic outlook.
“The economy isn’t just the stock market,” he says.
Plus, the holiday sales forecast is just a snapshot of a few
months out of an annual or multi-year context.
“Consumer attitudes are very strong,” he says. “I think
you’ve got to just take that into context. The consumer, when they believe
their finances have improved steadily, that means they are in a position to
spend. Certainly, the consumer has been the driver of the economy, actually
since the expansion started in 2009 [after the great recession].”
The trade association’s annual holiday spending forecast
takes into account several economic factors to project overall spending instead
of relying on per-consumer spending assumptions. Also, according to the NRF’s
forecast, gift cards are the most popular items on holiday wish lists,
requested by 60 percent of those surveyed, followed by clothing and accessories
at 53 percent, books/movies/music at 37 percent, electronics at 29 percent,
home décor at 23 percent, jewelry at 22 percent, personal care or beauty items
at 19 percent, sporting goods at 18 percent and home improvement items at 17
percent.
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