Holiday Retail Sales Forecasted To Rise 4.5%

Retailers Likely To Continue Strong Discounts

holiday SalesConsulting firm Deloitte is predicting 2013 holiday retail sales will increase year-over-year by 4.5%, an improvement over 2012, as retailers are likely to continue strong discounts to lure customers into stores. Despite economic headwinds, total holiday sales from November into January are likely to reach at least $963 billion, according to Deloitte's forecast.

"Rising home prices with steady job creation may buoy confidence in the economy and create a wealth effect," said Daniel Bachman, Deloitte's senior U.S. economist. "The debt ceiling and budget debate will resume this fall alongside uncertainty about the implementation of health care reform, which may cause some concern among consumers, but at a macro level, these factors are unlikely to have a significant effect on the economy and retail sales."

While traditional sales channels are expected to produce moderate gains during the holidays, Deloitte predicts non-store revenues, which include online, catalog-based and interactive television purchases, will rise sharply by 12.5%. Deloitte is also forecasting mobile-influenced store sales will account for 8%, or $66 billion, of retail revenues this holiday season.

"Retailers now realize how to engage shoppers through their mobile devices both inside and outside the store, which is having a profound impact on customer interaction, store traffic and conversion rates," said Alison Paul, vice chairman of Deloitte.

"Consumers using their smart phones are more likely to make a purchase compared with other shoppers in the store."

Deloitte's 2013 holiday sales forecast is optimistic compared to other research firms. By contrast, for example, ShopperTrak announced last week it expects holiday retail sales to rise by just 2.4%. Regardless of predictions, retailers like Kmart and Walmart are already aggressively advertising special holiday offers and several stores have plans to boost temporary hiring. In fact, Chicago-based consultancy Challenger, Gray & Christmas is forecasting retailers will add 700,000 temporary employees for the fourth quarter.