Holiday retail sales poised for gains, says NRF and Salesforce
Posted - October 10, 2019
By LM Staff · October 4, 2019
United States holiday retail sales are expected to be solid this year, according to data issued this week by the National Retail Federation (NRF) and Salesforce.
Holiday retail sales, as defined by the NRF, are sales in the months of November and December and exclude autos, gas, and restaurant sales. NRF said it expects holiday retail sales to rise between 3.8%-to-4.2% to between $727.9 billion and $730.7 billion. If this projection comes to fruition, even on the low end, it would top the average of 5.7% over the last five years.
NRF noted that last year’s holiday retail sales, at $701.2 billion, headed up 2.1% annually, in advance of the federal government shutdown, stock market volatility, and tariffs, among other factors. The organization added that its forecast is based on an economic model that takes into consideration a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit and previous retail sales.
“There are probably very few precedents for this uncertain macroeconomic environment,” NRF Chief Economist Jack Kleinhenz said in a statement. “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 said it expects online and other non-store sales to rise between 11%-to-14% this year to between $162.6 billion and $166.9 billion, ahead of last year’s $146.5 billion.
NRF officials said that the effect of tariffs on holiday spending, whether 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,” they said. “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.”
Salesforce’s take: San Francisco-based Salesforce said it expects U.S. digital commerce revenue growth to rise 13% annually this year, with total sales pegged to hit $136 billion in the U.S. and $768 billion globally.
“With six fewer days between Thanksgiving and Christmas, retailers will feel the pressure to create and fulfill demand before and after Cyber Week,” said Rob Garf, VP of Strategy and Insights for Retail and Consumer Goods, Salesforce, in a statement. “That said, our data indicates a very strong digital season is ahead. Retailers that provide more personalized experiences, click and collect offerings, and of course, unbeatable prices, will be the ones that succeed this holiday season.”
And with Thanksgiving falling later in the year, Salesforce said shoppers have six fewer days between Cyber Week (Nov. 25-Dec. 2) and Christmas to make their holiday purchases. And the company added that this will result in revenue being more evenly distributed throughout Cyber Week. In fact, an increase in early bird shopping on the Tuesday and Wednesday before Thanksgiving will drive 19 percent YOY growth in global digital revenue. For Black Friday, digital revenue is forecast at $7.3 billion in the U.S. and $39.6 billion globally. Cyber Monday will bring in an addition $8.2 billion in the U.S and $32.2 globally.”