Despite forecasts of Americans shopping online this holiday season versus producing foot traffic in brick-and-mortar retail stores, a new projection says holiday sales will grow 3.5% year-on-year.
A recent Synchrony Financial study finds seasonally adjusted sales for November and December 2013 were $505.5 billion, and 2014 sales are expected to top this figure by more than $17 billion.
This outlook for the 2014 holiday season is based on a number of indicators such as unemployment, gas prices, private residential construction, as well as non-traditional indicators Synchrony Financial identified as effective in developing its forecast. In addition to a steadying labor market, long-term strength in key economic indicators of personal consumption expenditures, consumer credit, and residential construction have produced a supportive environment for advancing retail sales.
This year, increasing access to consumer credit and improving home equity have helped consumers spend with confidence. Year-over- year through August, consumers made $64.5 billion more in retail sales purchases, after adjusting for seasonality.
Retail sales have kept pace with the gradual strengthening of the broader economy. From January to August 2014, retail sales categories of Non-store/E-retailers and Health & Personal Care led percentage gains and are up 6.7% and 6.3%, respectively, year-over-year. Last holiday season, both of these categories had strong year-over-year performance, as did specialty retailers.
Although it is yet to be seen which categories will lead holiday advances in 2014, results of Synchrony Financial’s recently issued third annual Major Purchase Consumer Study** indicate that while consumer confidence is rising, value overwhelmingly drives a major purchase decision, with more than 88% of accountholders surveyed, indicating they “always seek the best deal.”
Similar to last year, there is a shortened shopping period of 26 days between Black Friday and Christmas 2014, compared to 31 days in 2012. This impact to the full two-month holiday sales period is mitigated by consumers’ shift to online and mobile shopping. The accessibility afforded by these channels has reduced delayed purchases of hard-to-find products and late season, in-store deal shopping. For the full fourth quarter of 2013, e-commerce sales accounted for six percent of total retail sales, and were up +15.7% from the previous year.
For more data on Holiday Spending 2014 access CardData®. For information and commentary on Holiday Spending 2014 visit the searchable CardFlash® Library of more than 58,000 articles published since 1995. RAM Research® forecasts on Holiday Spending 2014 are available exclusively through CardWeb.com.®