The holiday shopping season is the biggest of the year and can account for up to 40 percent of a retailer’s annual sales.
There are still just over three weeks until Halloween, but it's never too early to consider the all-important holiday shopping season. Two forecasts for the holiday shopping season released Tuesday offer conflicting projections for consumer spending trends.
The National Retail Federation, the largest industry retail group, is expecting November and December sales to increase 4.1 percent to roughly $617 billion, higher than last year’s actual 3.1 percent increase during the same holiday shopping period. PwC US, on the other hand, foresees a drop in holiday spending from $735 in 2013 to $684, an indication of concern about disposable income and caution on the economy.
The holiday shopping season is the biggest of the year and can account for up to 40 percent of a retailer’s annual sales, according to the NRF. The season unfolds in four periods: pre-Thanksgiving, Black Friday, between Thanksgiving and Christmas, and post-holiday, when shoppers seek further deals and sales.
Should the NRF’s optimistic forecast be realized, it would be the first time since 2011 that holiday sales would increase more than 4 percent. Holiday sales on average have grown nearly 3 percent over the past decade, the organization reports. “We believe there is still room for optimism this holiday season, NRF Chief Economist Jack Kleinhenz said in a statement. “In the grand scheme of things, consumes are in a much better place than they were this time last year, and the extra spending power could very well translate into solid holiday sales growth for retailers; however, shoppers will still be deliberate with their purchases.”
Affluent household surveyed by Spectrem’s Millionaire Corner are feeling the optimism. The monthly Spectrem Affluent Investor Confidence Index surged in September to an eight-year high, while the Spectrem Affluent Household Outlook, a monthly measure of Affluence investor confidence in four financial factors that impact their daily lives, reached its highest reading in September since April 2007.
Just over half (52 percent) of non-Millionaire households with a net worth of at least $100,000 (not including primary residence) report that their financial situation is better than it was one year ago, according to a 2014 Spectrem’s Millionaire Corner wealth level study. Roughly half (48 percent) expect their personal financial situation to be stronger one year from now. Of these, 55 percent are under the age of 45).
The PwC consumer spending trends report is the lump-of-coal alternative forecast. “The upcoming holiday shopping season will look very similar to 2013 as shoppers remain cautious on the economy,” Steve Barr, PwC’s U.S. retail and consumer practice leader, said in a statement. “
Driving decreased household holiday spending, include:
- Limited disposable income (64 percent)
- Rising cost of living (61 percent)
- Insufficient salary (37 percent)
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.