With 44 days left until the election and 96 days left until Christmas, I wanted to look at some happy news! I was having happy hour wine with friends last week, and the subject of shopping came up, as it always does. Since retail is my vocation and avocation, I was anxious to hear about what they will be doing for this holiday season. Would they cut spending, are they traveling, what items are they coveting to give to their friends and family?
This is the question on industry minds right now since retail sales in November and December comprise about 19% of annual spending. In the past ten years, retail sales have increased as follows:
The holiday total, which is not adjusted for inflation, includes online and other non-store sales, which were up 8.2% at $276.8 billion. Currently ecommerce comprises 16% of all retail sales.
In 2018, at the beginning of the pandemic, holiday sales were $691 billion. The sales increased to $964 billion in 2023. With all the unprecedented events emerging from the pandemic (inflation, supply chain issues, fed interest rate hikes, online retail sales, consumer fatigue with lack of human connection), the time series is at best flawed. Still, an easy calculation puts the 10-year CARG at 5.1% and the 5-year CARG at 3.4%. But adopting any time series is necessary considering the years of Covid shutdowns, which severely affected retail sales. In the early Covid period, growth was terribly slow but picked up significantly in 2020 and 2021 when most of the Covid restrictions were lifted and consumers were itching to get back out, visit friends, buy buy buy and travel!
Based on our experience, the data (both long term and short term, as well as other prognosticators) indicate nominal sales will grow between 2.5% and 3.5% this 2024 season, to reach an estimated $993 billion… or let’s just say an even TRILLION. A soft landing indeed!
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