Holiday Sales to Top $1 Trillion — Deloitte

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It is getting to be that time of year again. The holiday shopping season, we mean. And if the analysts at Deloitte are right, it will be a banner year.

The consultancy’s forecast for the November through January shopping season calls for a sales increase in the range of 3.6% to 4.0% compared with the 2015 holiday season. Total holiday sales are expected to surpass $1 trillion, excluding motor vehicle and car sales. E-commerce sales are forecast to total between $96 and $98 billion, up 17% to 19% year over year.

Last year was a tough one for retailers. They faced challenges from unseasonable weather, inventory problems, more technologically savvy consumers, and, worst, deep discounting that started early and remained deep into January.

Daniel Bachman, Deloitte’s senior U.S. economist, said:

Consumers have ramped up their spending this year on the back of a strong labor market. We also expect slightly higher growth in disposable personal income during the upcoming holiday season compared with last year. Consumer confidence also remains elevated, despite some fluctuations in 2016. Additionally, households have been drawing down their savings, and therefore spending has been healthier than would normally be expected given the rate of income growth. While attention toward presidential elections may be a temporary distraction in the early part of the holiday shopping season, it should not have a negative impact on sales, and retailers may benefit from a pickup in post-election consumer spending.

The firm also expects increasing disruption from market fragmentation. Vice Chairman Rod Sides explained:

Retail competition will not only come from the big box down the street or major e-commerce players. It is also likely to come from the small and midsized retailers that focus on niche products and experiences. This group has been collectively taking share from large, traditional retailers to the tune of $200 billion in annual sales over the last five years. The retailers that compete on differentiated products and experiences should be well positioned to outperform other competitors during the holiday season.

Deloitte also forecasts that digital interactions will influence 67%, or $661 billion, of retail store sales this holiday season. This figure reflects the amount of traditional brick-and-mortar retail sales impacted by shoppers’ use of digital devices, including desktop and laptop computers, tablets and smartphones.

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