According to forecasts released Tuesday by consulting firm Deloitte, retail sales growth this holiday season is expected to be less robust than in recent years.
But how dull that growth will be depends on how much high-income consumers are exaggerating and how many belts they tighten in low-income families.
Some economist Now calling for a K-shaped recovery — Scenarios in which certain types of industries benefit and others are excluded. Unlike the so-called U-shaped or W-shaped recovery, the growth of the K-shaped rebound is unevenly divided among income groups, creating a scenario where there are no “owners” and “owners”.
after Coronavirus infectious disease worldwide epidemic Some industries are still following an environment where workers can be productive at home. But others have seen sales decline as consumers avoid eating out, watching movies, and vacationing.
“One of two vacation scenarios will be implemented this year,” said Rod Sides, Deloitte’s vice president and retail and distribution leader. “History tells us… we’ll see consumer groups recover differently.”
According to Deloitte, retail sales for the year-end and New Year holidays are expected to increase by 1-1.5% over the November-January period, reaching between $1,147 billion and $1,152.9 billion. According to the U.S. Census Bureau, this compares to 4.1% growth in 2019, when sales were nearly $1.4 trillion.
The range from 1% to 1.5% is derived from a mix of two different scenarios driven by large and small spenders, Deloitte explains.
First, Deloitte predicts that sales could grow relatively reliably from 0% to 1% during the holiday season if consumers (especially low-wage earners) are nervous about their finances and health and need to spend more on necessities. If unemployment insurance benefits run out, the likelihood of this first scenario could increase, Deloitte said.
However, if wealthy consumers gain more trust in the second half of 2020, it could lead to even greater increases, from 2.5% to 3.5%. Factors that could boost confidence within this group include reduced unemployment, additional government stimulus, and effective Covid-19. Includes vaccines. . This scenario predicts that high-income consumers will not spend on vacation, and experiences such as concerts and Broadway tickets will be focused on spending on holiday gifts, and people are more eager to show off than ever.
Daniel Barkman, Deloitte’s U.S. economic forecaster, said, “While high unemployment and economic instability will weigh on overall retail sales this holiday season, the decline in spending on epidemic-sensitive services like restaurants and travel helped boost retail vacation sales somewhat. It can be.”
With so many consumers still spending most of their time at home and avoiding crowded public places, they are bound to spend more online this holiday season. Deloitte expects e-commerce sales to grow between 25 and 35 percent during the year-end and New Year, reaching between $182 billion and $195 billion. This compares to sales of $145 billion online at an annual growth rate of 14.7% in 2019.
However, this will require retailers to prepare for the onslaught of online orders starting as early as next month and by the last delivery deadline.
Deborah Weinswig, founder and CEO of Coresight, said in an interview, “A lot of the people I’m talking about right now are afraid of running out of stock.” “We already have a limited capacity… consumers have no idea this is coming.”
Many retailers, including Macy’s, They are predicting Year-end shopping starts earlier than ever this year.
a lot of people Closed for Thanksgiving Ahead of Black Friday, we close what has become a recent tradition. And in an era when social distancing must be implemented, strategies are being sought to prevent overcrowding of stores. Businesses are trying to gauge what consumers will want to buy in the midst of a global health crisis. The agreement is as follows:
According to Deloitte, retailers, perhaps most importantly, have to plan a scenario where the US recovery is choppy.