Deloitte Forecasts a 2.5 to 3 Percent Increase in U.S. Holiday Sales

Although the slow U.S. economic recovery and uncertainty overseas are sending shivers through consumers this fall, retailers should expect small gains in 2011 holiday sales, forecasts Deloitte.


“Consumer spending was on the rise for several months despite dampened confidence in the economy among U.S. households,” says Carl Steidtmann, Deloitte’s chief economist. “Those earlier gains have begun to flatten and may be tempered by persistent weakness in the housing and employment sectors and pressures from the European debt crisis."


Steidtmann warns retailers will face tougher comparisons this year after last year’s substantial increase in holiday sales.


Deloitte’s retail & distribution practice expects total holiday sales to reach between $873 and $877 billion, representing a 2.5 to 3 percent increase in November through January holiday sales, excluding motor vehicles and gasoline, over last season. This growth rate is smaller than last year’s 5.9 percent gain.


Additionally, Deloitte forecasts a 14 percent increase in non-store sales. Nearly three-quarters of non-store sales result from the online channel with additional sales coming from catalogs and interactive TV. 


“Double-digit growth in the non-store channel has given the industry a major boost, and retailers that put online channels to work for their physical storefronts have the advantage,” says Alison Paul, vice chairman, Deloitte LLP and U.S. retail & distribution sector leader.


“The brick-and-mortar store is still central to the shopper experience. Retailers that integrate the power of the sensory experience in-store with relevant, timely information via their websites and mobile applications are well-positioned to lead the way this holiday season.”


Paul notes that while economic events have the potential to soften consumer spending this season, businesses are already operating at lean and efficient levels and positioning themselves to weather a period of slow growth. However, Paul advises retailers to be prepared with contingency plans.


“Retailers need to be nimble enough to quickly adapt and adjust their inventory, assortment, pricing and promotional strategies when consumer demand fluctuates.”






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