The National Retail
Federation said it expects holiday retail sales during November and December to
increase between 3.8 percent and 4.2 percent over 2018 to a total of between
$727.9 billion and $730.7 billion. The numbers, which exclude automobile
dealers, gasoline stations and restaurants, compare with an average holiday
sales increase of 3.7 percent over the previous five years.
“The U.S. economy is continuing to grow and consumer spending is still the
primary engine behind that growth,” NRF President and CEO Matthew Shay said.
“Nonetheless, there has clearly been a slowdown brought on by considerable
uncertainty around issues including trade, interest rates, global risk factors
and political rhetoric. Consumers are in good financial shape and
retailers expect a strong holiday season. However, confidence could be eroded
by continued deterioration of these and other variables.”
“There are probably very few
precedents for this uncertain macroeconomic environment,” NRF Chief Economist
Jack Kleinhenz said. “There are many moving parts and lots of distractions that
make predictions difficult. There is significant economic unease, but current
economic data and the recent momentum of the economy show that we can expect a
much stronger holiday season than last year. Job growth and higher wages mean
there’s more money in families’ pockets, so we see both the willingness and
ability to spend this holiday season.”
NRF expects online and other
non-store sales, which are included in the total, to increase between 11
percent and 14 percent to between $162.6 billion and $166.9 billion, up from
$146.5 billion last year.
The effect
of tariffs on holiday spending – either directly or through consumer confidence
– remains to be seen. Some holiday merchandise – including apparel, footwear
and televisions – is subject to new tariffs that took effect September 1, and
other products will have the tariffs applied on December 15. Retailers are
using a myriad of mitigation tactics to limit the impact on consumers, and the
impact will ultimately vary by company and product. Small businesses, in
particular, have already been forced to raise prices. Nonetheless, 79 percent
of consumers surveyed for NRF in September were concerned that tariffs will
cause prices to rise, potentially affecting their approach to shopping.
Holiday sales during 2018
totaled $701.2 billion, an unusually small increase of 2.1 percent over the
year before amid a government shutdown, stock market volatility, tariffs and
other issues.
Even with trade
uncertainty and the increasingly tight labor market, retailers have been hiring
extra staff to meet expected demand during the holiday season. NRF expects
retailers to hire between 530,000 and 590,000 temporary workers, which compares
with 554,000 in 2018.