FTI Consulting Projects U.S. Holiday Retail Sales to Grow 5.2 Percent
Macroeconomic Indicators, Strong Consumer Sentiment and a Resilient Job Market All Point to a Promising 2019 Holiday Season
While challenges to the U.S. retail sector remain, the economic backdrop entering this holiday season is much the same as it was a year ago, supporting the forecasted spending increase, according to FTI Consulting’s Retail & Consumer Products practice. The factors driving this growth include positively trending macroeconomic indicators, upbeat consumer sentiment, a resilient job market and tame inflation levels across the consumer sector.
A positive distinction from last year may be the performance of financial markets, the forecast notes. A severe market selloff last December may have contributed to the weak season, which does not appear imminent this year.
Similar to the 2018 retail forecast, sales growth will again disproportionately benefit online sellers. FTI Consulting’s Holiday Retail Forecast highlights that the online channel now commands nearly a 16 percent share of total retail sales and will continue to gain just over one percentage point of market share annually, or about
“Not only is the online channel capturing a majority of total sales growth generally, but consumers tend to shop online even more than usual during the holiday season, with smoother ordering and delivery processes, leading to smaller Black Friday crowds and less concern of disappointment for last-minute shoppers,” said
The report highlights that with total retail sales growing at about 4 percent annually, the movement of sales from stores to online is the equivalent of approximately 50 percent of the industry’s total annual sales growth. While the holiday season continues to be important, the retail sector is in the midst of a profound transition that it must confront year-round. The money spent during the holiday season is increasingly concentrated with fewer retailers, making prosperity less shared and the aggregate success of the season less connected to the outcomes for many players. Moreover, this season retailers will have to contend with Amazon’s free one-day delivery for Prime members, a new benefit that proved to be popular with
“The shorter holiday season this year given the late
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Source: FTI Consulting, Inc.