Holiday 2018 is approaching quickly and with it come the predictions for just how the crucial sales period will shake out.
So far, economic indicators have expectations running high but a few potential problems could cloud that otherwise rosy outlook.
Deloitte is forecasting an even better holiday period this year than last. The consulting firm anticipates sales will top $1.1 trillion during the season. The firm’s estimates are for sales from November through January, seasonally adjusted and excluding gas and car sales.
“The anticipated growth in holiday sales is likely because of solid disposable personal income growth, which we expect will be in the 5 to 5.4 percent range. That is above last year’s 4.7 percent,” Daniel Bachman, Deloitte’s U.S. economic forecaster, said in the company’s holiday forecast press release. “A strong labor market should also aid retail spending, along with elevated consumer confidence and a stable personal savings rate of around 7 percent.”
The e-commerce surge is also expected to continue. Deloitte projects online sales will grow between 17 percent and 22 percent this year on top of the 16.6% gain during the last holiday season.
The firm tempered its robust outlook with a few notes on issues that could take some of the cheer out of the fourth quarter—namely interest rates and a potential downturn in the possibly overvalued stock market.
That aside, Rod Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader, says retailers have been working toward better delivery capabilities, in-store experiences and e-commerce technology—all of which could pay off big.
“The leading retailers this holiday season could be the ones who are able to strike the right balance between innovation, experience and value that best engages the consumer and stands out in a busy season,” he said.
In short, it’s all about convenience and allowing consumers to shop when and where they want.
Sides expanded on his outlook for CNBC, providing insight into specific sectors. “We think most retailers will have a good holiday season if they have a distinctive value proposition. We think off-price will continue to do well, and there will be a rebound in luxury,” he said.