The National Retail Federation, the nation’s largest retail trade group, baked the shorter season into its forecast, but it says the real drivers will be the job market. It forecasts that holiday sales will rise between 3.8% and 4.2%, an increase from the disappointing 2.1% growth seen in the November and December 2018 period that came well short of the group’s prediction.
Last year’s holiday sales were hurt by turmoil over the White House trade policy with China and a delay in data collection by nearly a month because of a government shutdown. This year’s holiday forecast is above the average holiday sales growth of 3.7% over the previous five years.
NRF expects online and other non-store sales, which are included in the total, to increase between 11% and 14%, for the holiday period.
Black Friday is expected to once again be the largest shopping day of the season, followed by the last Saturday before Christmas, according to MasterCard SpendingPulse, which tracks spending across all types of payments including cash and check. Thanksgiving Day isn’t even on the top 10 holiday shopping days, according to MasterCard.
The 2019 holiday season will be a good measure of the U.S. economy’s health. Many retail CEOs describe their customers has financially healthy, citing moderate wage growth and an unemployment rate hovering near a 50-year low.
“The overall picture is positive,” said Craig Johnson, president of Customer Growth Partners, a retail consultancy. “People are spending out of positive cash flow as opposed to borrowing.”
Economic growth has moderated since earlier this year, with growth at just 1.9% in the July-September quarter, down from 3.1% in the first three months of the year. Analysts blame at least part of that on the U.S.-China trade war, which has forced many companies to delay plans to invest and expand.
That’s left consumers as the main drivers. So far, Americans have kept up their spending, allaying fears of a recession.
With more holiday deals happening earlier to compensate for the late start, many have already started to shop. More than half of consumers have already started their holiday shopping and nearly a quarter of purchases have already been made, according to the annual survey released by the NRF and Prosper Insights & Analytics. The survey of 7,917 adult consumers was conducted Oct. 31 through Nov. 6.
“This is further evidence that the holiday season has grown far beyond the period between Thanksgiving and Christmas,” said Matthew Shay, president and CEO of NRF, in a statement.
Associated Press
