Ready for some holiday shopping? The average consumer is expected to buy more this year.
An early holiday shopping report is forecasting a moderate increase in retail sales, as consumers continue to deal with inflation.
In the first Deloitte 2024 Holiday Forecast, Deloitte, an audit, consulting, tax and advisory services firm, said holiday retail sales are likely to increase between 2.3% and 3.3% this year.
Holiday sales predicted to return to pre-pandemic levels
Analysts with Deloitte said sales growth is expected to return to pre-pandemic levels in line with trends over the past decade. Holiday sales, particularly in e-commerce, saw a sharp surge after the pandemic, Deloitte said.
"This year we expect slower growth than last year, with a return to more normal growth patterns post-pandemic," Akrur Barua, an economist for Deloitte Insights, told USA TODAY. "Sales are likely to increase between 2.3% and 3.3% this season versus the 4.3.% increase from the 2023-2024 season.
"Though disposable personal income has been growing steadily this year, it is growing at a slower pace than the 2023-2024 season. The end to pandemic-era savings will also weigh on consumer spending growth. And so will high-credit card debt as they approach the holiday season," Barua said.
Deloitte is projecting overall holiday sales totaling $1.58 to $1.59 trillion during the November to January timeframe. Retail sales between November 2023 and January 2024 (seasonally adjusted and excluding automotive and gasoline) grew 4.3% and totaled $1.49 trillion, according to the U.S. Census Bureau.
Additionally, Deloitte is forecasting that e-commerce sales will grow between 7.0% to 9.0% year-over-year, totaling between $289 billion to $294 billion this season. That's compared to 10.1% growth last year with a $252 billion total.
Consumers are looking for deals
Consumers will continue to take advantage of online deals to maximize their spending, Michael Jeschke, principal of Deloitte Consulting LLP, said in a press release.
"While this holiday season reflects a return to trend levels of growth, retailers who focus on building loyalty and trust with consumers could be well positioned for success," Jeschke said in the release.
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Steady growth in disposable personal income and a steady labor market "are both tailwinds that will support retail sales this season. While declining inflation will weigh on the nominal value of retail sales, we expect that it will boost consumers’ purchasing power through growth in real wages, driving an increase in sales volumes," Barua said.