After a turbulent start to 2014, the U.S. retailers expect sales in November and December to increase a healthy 4.1% to $616.9 billion, higher than 2013’s actual 3.1% increase during that same time frame.
This would mark the first time since 2011 that holiday sales would increase more than 4%.
“The consumer is back,” said Hackett Associates founder Ben Hackett.
The forecast by the National Retail Federation states holiday sales on average have grown 2.9% over the past 10 years and represent approximately 19.2% of the retail industry’s annual sales of $3.2 trillion.
“While expectations for sales growth are upbeat, it goes without saying there still remains some uneasiness and anxiety among consumers when it comes to their purchase decisions,” said NRF President and CEO Matthew Shay. “The lagging economic recovery, though improving, is still top of mind for many Americans. Recognizing the need to keep household budgets in line, we expect shoppers will be extremely price-sensitive as they have been for quite some time.”
NRF said while consumer confidence has been unstable much of the year, improvements over the past few months in key economic indicators will give way to increased spending power among holiday shoppers.
“Though we have only seen consumer income and spending moderately and erratically accelerate this year, we believe there is still room for optimism this holiday season,” said NRF Chief Economist Jack Kleinhenz. “In the grand scheme of things, consumers are in a much better place than they were this time last year, and the extra spending power could very well translate into solid holiday sales growth for retailers. However, shoppers will still be deliberate with their purchases, while hunting for hard-to-pass-up bargains.”
Meanwhile, a separate forecast said import cargo volume at U.S. major retail container ports is expected to see a final surge and set a new monthly record in October as the holiday season approaches.
“Increasing congestion at the nation’s ports as well as the ongoing West Coast labor negotiations are ongoing concerns and retailers are making one last push to make sure they’re stocked up for the holidays,” explained NRF Vice President for Supply Chain and Customs Policy Jonathan Gold. “Retailers are working hard to make sure customers can find what they’re looking for regardless of what happens at the ports.”
NRF noted while cargo volume does not correlate directly with sales, it is a barometer of retailers’ expectations.