The holiday shopping season in 2024 is marked by abnormalities: a contentious presidential election, uncertainty about the direction of the economy and stubborn inflation. But despite those obstacles, retail sales are expected to be … normal.
The National Retail Federation said Oct 14 that it expected holiday sales to increase 2.5 per cent to 3.5 per cent from 2023, to as much as US$989 billion (S$1.29 trillion). That’s slightly slower growth than the year before, when holiday sales in 2023 rose 3.8 per cent, but in line with the 3.6 per cent annual increases that marked the season before the COVID pandemic sent shopping into overdrive.
The economy “looks much more like a pre-pandemic economy in terms of the spending patterns and the growth,” said Mr Matthew Shay, CEO of the National Retail Federation, on a call with reporters.
The group defines the holiday season as sales from Nov 1 to Dec 31, and does not include purchases from auto dealers, gasoline stations and restaurants. Once again, the growth of e-commerce sales is expected to outpace total retail sales, with the trade group estimating that they will rise 8 per cent to 9 per cent, between about US$295 billion and US$298 billion.
Although higher prices continue to cause sticker shock at the store, the labour market has stayed surprisingly strong. Wage growth has outpaced inflation, allowing people to continue to spend even as they shift priorities from discretionary items and dining out to essential things like groceries.
Mr Shay said he expected consumers to be price-conscious and pragmatic during the holiday shopping season, which can be a make-or-break period for retailers. “Many consumers do have those interest rates and the lingering inflation of some categories on their mind,” he said. “So we expect there will be a promotional environment.”
This
