Trade war uncertainties and fears of an economic slowdown will do little to prevent Americans from hitting the stores come the holidays, according to Deloitte’s annual retail sales forecast ahead of the crucial shopping season.
The professional services firm reported that U.S. retailers can expect to see a spike of 4.5% to 5% in sales, compared with 2018’s 3.1% gain. Total revenues between the months of November and January are predicted to exceed $1.1 trillion, versus the $1.09 trillion recorded the previous year.
E-commerce gets an even bigger boost, increasing 14% to 18% year-over-year to reach $144 to $149 billion in sales — up from last year’s $126.4 billion. Slower growth in 2018, said Deloitte, was likely driven by the prolonged government shutdown, an uptick in consumer savings and a sharp decline in the stock market.
“The projected holiday season growth is, in part, due to the current health of the labor market. Near record-low unemployment rates, coupled with continued monthly job creation, may encourage people to spend more during the holiday season,” said Daniel Bachman, Deloitte’s U.S. economic forecaster. “Additionally, we continue to see consumer confidence elevated, which also helps boost holiday spending.”
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The positive news come three weeks after the first set of President Donald Trump’s fourth tranche of tariffs on $300 billion worth of Chinese goods went into effect. Starting Sept. 1, $112 worth of imports have been hit with a 15% levy. The second round of duties have been delayed until Dec. 15, following the peak holiday retail period.
Trade groups and industry executives have warned about the tariffs’ impact on businesses and consumers, and retailers have already been gearing up for cost increases within their supply chains and product lines. However, Deloitte predicts that growing disposable income — which reached an all-time high this year — as well as solid consumer spending will help keep the tariff fallout at bay.
“Retailers, across channels, should expect a strong holiday season in 2019,” added Rod Sides, vice chairman at Deloitte LLP. “Convenience is the new retail currency; retailers who offer seamless experiences, have products available and can deliver items more quickly than ever are most likely to win this holiday season.”
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