US retail sales are expected to grow by 2.3% to 3.3% year-on-year this holiday season, according to a recent prediction by Deloitte. The professional-services group estimates revenues will reach between $1.58 trillion and $1.59 trillion from November to January. This growth rate is slower than last year’s 4.3% increase, reflecting both easing inflation and rising credit card debt.
Akrur Barua, an economist at Deloitte Insights, noted that while holiday sales will increase at a slower pace, strong growth in disposable personal income and a steady job market should support sales. He explained that declining inflation boosts consumers’ purchasing power, but it may also limit the nominal increase in sales value. Additionally, increased credit card debt and the depletion of pandemic savings could impact sales growth this season.
Deloitte also highlighted that a significant portion of sales will come from online shopping, with e-commerce sales projected to rise by 7% to 9% year-on-year, totaling between $289 billion and $294 billion.
Meanwhile, Mastercard forecasts a 3.2% year-on-year increase in spending from November 1 to December 24. The company observed that Millennials and Gen Z consumers are gravitating towards newer, affordable jewelry brands rather than traditional ones. While spending on these new brands is expected to grow by 9%, the average transaction value is likely to drop from $121 to $116.
Michael Jeschke, a principal at Deloitte Consulting, stated that this season’s retail sales growth aligns with trends from the past decade. He emphasized that e-commerce sales will remain strong as consumers seek online deals. Retailers that prioritize building customer loyalty and trust may find greater success this holiday season.
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