Economists are predicting strong retail sales for the upcoming holiday season, thanks to increases in personal income and elevated consumer confidence. Deloitte forecasts holiday sales growth of as much as 4.5%. Total holiday sales, excluding motor vehicles and gasoline, could reach $1.05 trillion between November and January, according to Deloitte’s report.
E-commerce is expected to get an even bigger jolt, jumping between 18% and 21%, compared with the 2016 holiday season. E-commerce sales are expected to be as high as $114 billion during the holiday season.
Daniel Bachman, senior U.S. economist for Deloitte, said four primary factors are behind the projected uptick: Disposable personal income grew 2% throughout the year and could go even higher during the holidays, consumer confidence remains high, the labor market is strong and the personal savings rate should remain stable. Still, he noted that factors like the unusually active hurricane season and the potential threat of a government debt ceiling crisis could bring uncertainties to retail spending.
Despite the healthy prediction, retail remains a highly competitive arena, said Rod Sides, vice chairman of Deloitte. “Retailers should modify their assumptions about what drives traffic, engagement and sales growth, and realign around customer experience, creating relevant, emotional and inspirational connections that go beyond product, price and assortment,” he added.
Deloitte’s forecast rings true for Leslye White, of Burlington, NC-based sock supplier Pro Feet (asi/79707), who believes the promotional products and apparel industry is poised for a strong holiday showing as well. “We can put on our website holiday or any kind of unique socks or logos, and that’s what everyone wants,” she said. “Custom programs are growing like crazy.”
Industry distributors are also expecting strong growth at the year’s end. Tad Webster, president and managing director at Brandinc U.S. (asi/145212), said his firm’s sales volume is up 20% compared to last year, with gross profit margin up by 2%. He attributed the growth to account diversification and large, global client opportunities. “Brandinc is having another stellar sales year,” he said. “We see this trend continuing as we move into the fourth quarter.”
Axis Promotions (asi/128263) is seeing a great increase in the third quarter and CEO Larry Cohen is confident the trend will continue. “Corporate profits are up, the stock markets are up, and we are finally seeing some growth in individual wages,” he said. “We are already working on some significant programs for the holidays and expect that this will pick up soon.”