In the months leading up to and including the holidays, November and December, the National Retail Federation predicts sales will increase 3.7 percent to $630.7 billion. Online sales are supposed to increase even more from 2014, growing between 6 and 8 percent, totaling as much as $105 billion.
The overall increase in sales is significantly higher than the 10-year, 2.5 percent average. In total, holiday sales are predicted to make up about 19 percent of retail's $3.2 trillion in sales for 2015.
"With several months of solid retail sales behind us, we're heading into the all-important holiday season fully expecting to see healthy growth," said NRF President and CEO Matthew Shay. "However, while economic indicators have improved in several areas, Americans remain somewhat torn between their desire and their ability to spend; the fact remains consumers still have the weight of the economy on their minds, further explaining the complex retail spending environment we are seeing right now. We expect families to spend prudently and deliberately, though still less constrained than what we saw even two years ago."
Sales could be diminished by another government shutdown in mid-December, and a slower pace of job creation and income growth. In addition, price, value and timing will all affect when and where consumers spend over the holidays. In order to capture shoppers, retailers will need to be competitive not only on price, but also on digital initiatives, store hours and product offerings.
"Similar to last year in the sense we're coming off a rather disappointing first half, this holiday season brings to light several crosscurrents that still exist for American households," said NRF Chief Economist Jack Kleinhenz. "While confidence data is encouraging, slower job growth in 2015, deflationary retail prices and the mix of consumer spending somewhat shifting toward big ticket items and services, as well as the wild card in our government spending debates, will all contribute to the slower growth rate of sales expected for the holiday season."
In 2014, holiday sales rose 4.1 percent from the year before. This year's NRF projections are similar to Deloitte's data last month that predicted holiday sales to rise between 3.5 percent and 4 percent in 2015. Even more, 83 percent of consumers will start purchasing what's on their holiday lists before Cyber Monday.
-See this National Retail Federation press release
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