US holiday sales are expected to grow at their slowest pace in six years, data from Deloitte showed on Thursday as persistent inflation and dried up savings turn shoppers more frugal for the all-important shopping period.
Holiday retail sales are likely to rise between 2.3 percent and 3.3 percent in the November 2024-January 2025 period, totaling up to $1.59 trillion, data report said, from a 4.3 percent growth to $1.54 trillion last year.
Sales grew 3.1 percent in 2018.
Holiday season sales generally account for more than half of US retailers’ annual revenue. A shorter season this year ― with only 27 days between Thanksgiving and Christmas ― has pushed retailers into launching higher promotional discounts earlier in the season.
Consumers across all income brackets have been hit by lower personal savings, which dipped to about 3.4 percent in the recent months, compared to an average of 3.8 percent in June this year, according to the report.
Customers are expected to begin bargain hunting early, looking for additional discounts across categories including groceries and home goods, as they tighten their purse strings.
Deloitte expects e-commerce sales to rise in the 7 percent-9 percent range in the 2024 holiday season, totaling up to $294 billion, compared with the 10.1 percent increase to $270 billion last year.
In-store sales are expected to rise between 1.3 percent and 2.1 percent to up to $1.3 trillion in the upcoming holiday season, compared to a rise of 3.1 percent to $1.27 trillion, a year ago.
“Rising credit card debt and the possibility that many consumers have exhausted their pandemic-era savings will likely weigh on sales growth this season compared to the previous one,” said Michael Jeschke, leader of Deloitte Consulting’s Retail & Consumer Products.
“Our forecast indicates that e-commerce sales will remain strong as consumers continue to take advantage of online deals to maximize their spending.”
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