Deloitte projects holiday retail sales to increase by 4.5-5%

Big Four consultancy Deloitte expects holiday retail sales to jump between 4.5-5% in 2019, according to its annual holiday retail forecast. The firm projects that e-commerce sales will grow 14-18% during the upcoming holiday season.

Overall, the consultancy expects that retail holiday sales will exceed $1.1 trillion in the US between November and January. E-commerce holiday sales are expected to reach between $144-149 billion.

The strong growth predictions are being driven by a healthy labour market and strong consumer confidence. “Near record-low unemployment rates, coupled with continued monthly job creation, may encourage people to spend more during the holiday season," Daniel Bachman, Deloitte's US economic forecaster, said. "The economy is still growing, albeit at a slower rate. Additionally, we continue to see consumer confidence elevated, which also helps boost holiday spending."

The growth predictions reflect expectations for consistent growth throughout the season. Deloitte’s predictions in last year’s holiday retail forecast overshot the actual results because of a weaker than expected December. In 2018, the firm predicted a holiday retail sales increase of 5-5.6%, but sales only grew 3.1% to reach $1.09 trillion according to the US Census Bureau. The 2018 e-commerce sales projection of 17-22% growth, meanwhile, turned out to be a lower 11.2% increase, reaching $126.4 billion.

Last December, the government shutdown, an uptick in consumer savings, and a steep stock market decline may have contributed to the lower growth results, according to Deloitte.

"Based on a growth in consumer disposable income and spending indicators, retailers, across channels, should expect a strong holiday season in 2019,” said Rod Sides, vice chairman, Deloitte LLP and US retail and distribution sector leader.

"We've seen retailers continue to improve customer experience, invest in the fundamentals and leverage relationships with innovative startups to boost engagement and efficiency. But, convenience is the new retail currency; retailers who offer seamless experiences, have products available, and can deliver items more quickly than ever are most likely to win this holiday season," Sides added.