Holiday Season to be a Good One for Retailers

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American retail outlets are currently getting ready for one of the most extravagant weekends. A projected 164 million plan to go shopping this Thanksgiving Day through Cyber Monday, according to the National Retail Federation (NRF).

The NRF survey further projected that nearly 21% are expected to shop during the Thanksgiving Day, 41% are planning to shop on Small Business Saturday and 20% on Sunday. The shopping weekend will conclude on Cyber Monday, with almost 46% expected to gain the most from online bargains. However, Black Friday will be the busiest with 71% likely to splurge.

NRF President and CEO Matthew Shay said that “whether it’s heading to the stores after finishing their turkey or going online on Cyber Monday, consumers will be shopping all weekend.” So, it goes without saying that retailers stand to profit.

Retailers to End 2018 on a Promising Note:

The NRF, additionally, stated that holiday retail sales for this month and next — excluding automobiles, gasoline and restaurants — will climb between 4.3% and 4.8% from last year to reach a total of $717.45 billion to $720.89 billion. Consumers are anticipated to splurge an average of $1,007.24 during the upcoming holiday season, up 4.1% from the projection of $967.13 for last year.


Source. U.S. Census. Reflects May 25, 2018 Census revisions for 2013-2017.

Just as importantly, Moody’s projected inclusive holiday sales growth of 5% to 6%, above the long-term average, while eMarketer projects growth of 6%, the highest growth rate since 2011.

What Are the Catalysts Behind this Rise in Spending?

Outlays are likely to soar as the US economy is chugging along and consumers are pretty much confident about their well-being. The U.S. economy, in the last two quarters, posted the fastest six-month growth in four years and is on track to hit Washington’s annual growth target of 3%. If that happens, it would be the best yearly performance since 2005, two years before the Great Recession.

The economy got a boost in Q3, with GDP advancing at an annualized pace of 3.5%, per the U.S. Commerce Department. The country’s total output of goods and services, in fact, followed an even stronger 4.2% growth in Q2. Consumers in America, at the same time, are currently most confident in almost two decades, courtesy of a solid labor market. The consumer confidence index climbed to 137.9 in October from 135.3 in September, per the Conference Board.

Seasonal Holiday Sales (in billions)

Sector
2017- Holiday Sales
2017 Annual Sales
% Annual from Holidays
Building Materials & Garden Equipment
$60.50
$376.90
16.05%
Clothing Stores
$42.20
$190.60
22.14%
Department Stores
$14.60
$54.10
27.0%
Discount Department Stores
$22.30
$96.20
23.18%
Electronic Shopping & Mail-Order Houses
$122.10
$545.00
22.40%
Electronics & Appliance Stores
$22.30
$97.00
22.99%
Food And Beverage Stores
$128.10$717.9017.84%
Furniture & Home Furnishings Stores
$22.60
$117.40
19.25%
Health & Personal Care Stores
$59.30
$333.40
17.79%
Hobby, Toy, And Game Stores
$5.60

$18.70

29.95%
Jewelry Stores
$9.10
$32.40
28.09%
Sporting Goods Stores
$9.20
$44.70
20.58%
Warehouse Clubs & Superstores
$90.90
$463.00
19.63%

Bottom Line

Given the bullish holiday sales trend into account, retailers are certainly set to see a strong year-end rally. Buoyant economic conditions and a two-decade high consumer sentiment are surely proving beneficial for retailers as of now.

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  • By admin
  • |
  • November 28, 2018

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