NEW YORK — Holiday sales in the United States will grow at their slowest pace in several years this season as shoppers remain careful with their budgets and hunt aggressively for discounts, according to a forecast released on Wednesday by a national retail trade group.
The American Retail Merchants Council projected that sales in November and December will rise between 2.8 and 3.6 percent from last year, with a midpoint of 3.2 percent, to roughly $1 trillion. Last year, holiday sales grew about 4 percent.
Shoppers start early and shop around
The group said its surveys show that consumers plan to spend about the same as last year on gifts, but more of them intend to compare prices online, wait for promotions and split purchases between in-store and online channels. More than 40 percent of shoppers told the group they had already begun buying gifts by early October.
People are not pulling back completely. They are just being smarter and more patient. The retailers that win this year will be the ones with clear prices, reliable inventory and easy returns.
Patricia Glover, chief economist, American Retail Merchants Council
Glover said wage gains and a steady job market are supporting spending, but higher costs for rent, insurance and car payments are leaving many households with less room for extras. She expects categories such as toys, small electronics and beauty products to hold up, while furniture and large appliances are likely to remain soft.
- 3.2 percent: projected growth in holiday sales, versus about 4 percent last year
- 8 to 10 percent: expected growth in online holiday sales
- 480,000: seasonal hires expected, down from about 520,000
- 40 percent-plus: share of shoppers who started buying before mid-October
Fewer seasonal jobs
The forecast also suggested that retailers will hire fewer temporary workers this year. Many chains invested in automated warehouse systems and self-checkout over the past few years and say they need fewer extra hands for the rush. Some are instead offering existing staff more hours.
At Linden & Grove, a department store chain with 60 locations, executives said they plan to hire about 10 percent fewer seasonal employees than last year. “Our full-time people asked for more hours, and we would rather give it to them,” said the company’s chief operating officer, Marcus Avery.
Smaller retailers are preparing in their own ways. Joanna Pruitt, who owns a toy and game shop in Kansas City, Mo., said she ordered inventory earlier than usual and cut her orders of higher-priced items by about 15 percent. “I would rather sell out of the expensive stuff than sit on it in January,” she said.
Some independent forecasters are slightly more optimistic. A separate estimate from Copperline Analytics, a firm that tracks card spending, projected growth closer to 4 percent, citing stronger-than-expected spending on travel and dining that it believes will carry into the holidays.
Analysts said the shorter-than-usual window between Thanksgiving and Christmas this year could add pressure on stores to start promotions earlier. Several large chains have already announced October sales events branded as early holiday deals.
Retailers will also watch return rates closely. Last year, returns cost the industry billions of dollars, and some chains have begun charging fees for mailed returns or shortening return windows on certain items. Consumer groups have urged shoppers to read return policies carefully before buying gifts.
