Sales in November and December are expected to increase 3.9% to $602.1 billion, according to the National Retail Federation. The forecast is over 2012’s actual 3.5% holiday season sales growth and higher than the 10-year average holiday-sales growth of 3.3%.
“Our forecast is a realistic look at where we are right now in this economy—balancing continued uncertainty in Washington and an economy that has been teetering on incremental growth for years,” says NRF president and CEO Matthew Shay.
“Overall, retailers are optimistic for the 2013 holiday season, hoping political debates over government spending and the debt ceiling do not erase any economic progress we’ve already made,” adds Shay.
Concerning the recent government shutdown and NRF’s holiday outlook, he notes, “Our forecast is also somewhat hinging on Congress and the Administration’s actions over the next 45 days. Without action, we face the potential of losing the faith Americans have in their leaders, and the pursuant decrease in consumer confidence.”
Economic variables including positive growth in the U.S. housing market and an increased consumer appetite to buy larger-ticket items give retailers reason to be cautiously optimistic for solid holiday-season gains. However, much remains up in the air, including fiscal concerns around the debt ceiling and government funding, income growth and even policies and actions surrounding foreign affairs—all of which could impact holiday sales.
According to the NRF, the holiday season can account for anywhere from 20% to 40% of a retailer’s annual sales, and accounts for about 20% of the total retail industry's annual sales.
And NRF's Shop.org forecasts online sales in November and December to grow between 13% to 15% over last holiday season to as much as $82 billion.
“Online and mobile continue to be a leading area of growth for retailers," comments Shay. "In this economy, savvy, cost-conscious consumers go to the Web to do their research and get the best bang for their buck. In addition to researching what their peers are saying online about products and gifts this holiday season, consumers will use the buy-online-pickup-in-store option, retailers’ apps and mobile websites to find something special for their loved ones.”
NRF chief economist Jack Kleinhenz states, “The economy continues to expand, albeit at an unspectacular pace. For consumers to turn out this holiday season, we need to see steady improvements in income and job growth, as well as an agreement from Washington that puts the economic recovery first. Our forecast leaves room for improvement, while at the same time provides a very realistic look at the state of American consumers and their confidence in our economy.”
Retailers are expected to hire between 720,000 and 780,000 seasonal workers this holiday season, in line with the actual 720,500 they hired in 2012—which was a 13% year-over-year increase from 2011, says the NRF.
“Retailers will add hundreds of thousands of valuable jobs to the economy this holiday season, including extra staff for their distribution centers, store managers, ecommerce and mobile positions and helpful staff associates,” states Shay. “Teenagers, college students and adults love working in retail during the holidays, especially with the perks of employee discounts and being the first to see what’s added to store shelves. Additionally, as we’ve heard from several companies, these holiday positions offer thousands of people the opportunity to turn seasonal employment into a long-term dynamic and thriving career opportunity.”
[Image courtesy of Thinkstock/Tay Rees/Photodisc]