It is expected that holiday sales are likely to increase between 1 and 5%, and Deloitte’s overall sales forecast between 1,147 and 1,152 billion dollars during the period of November-January.
E-commerce sales are projected to grow from 25-35% year-on-year (YoY) during the holiday season of 2020-2021, compared to 2019 when sales only rose by 14.7 percent.
Overall, holiday sales are expected to generate between 182 and 196 billion dollars this season.
“The lower projected holiday growth this season is not surprising given the state of the economy.
While high unemployment and economic anxiety will weigh on overall retail sales this holiday season, reduced spending on pandemic-sensitive services such as restaurants and travel may help bolster retail holiday sales somewhat.
“E-commerce is likely to be a big winner because consumers have shown a clear movement towards buying online rather than at brick and mortar stores.
Taking into account the uncertainty of the holiday season due to Covid-19, there are two scenarios which could take place.
Either a relatively stable YoY sales increase of 0-1 percent, or a significant increase between 2.5-3.5 percent.
An increase between 1 and 1.5 percent is the melding of the two.
For the stable scenario (0-1 percent YoY increase), consumers will continue to experience discomfort regarding their finances and health with the ongoing pandemic, and will reserve their funds for non-discretionary items.
The current savings rate is more than double what it was last year (17.8 percent in July, versus 7.4 percent in 2019).
With the second scenario (2.5-3.5 percent YoY increase), consumers’ confidence will increase.
This could be due to the creation of a vaccine, an unemployment insurance benefit supplement, or many other factors.
In this case, because of a lack of travelling during the summer, funds that were potentially allocated for travelling may be redirected towards gift buying.