Former Toys "R" Us CEO Gerald Storch warns that the upcoming holiday season will be very difficult for retailers due to persistent inflation, as consumers face rising prices, interest rates, credit card debt, and student loan burdens.
Online retailers are advised to use discounts, customer-friendly return policies, and AI tools to capture sales during the upcoming holiday season as global online sales are predicted to reach $1.19 trillion, with the US accounting for $273 billion, according to Salesforce's holiday forecast.
The U.S. economy experienced modest growth in July and August, driven by pent-up demand for leisure activities, while nonessential retail sales slowed, according to the Federal Reserve's "Beige Book" survey.
Retail sales in the US rose 0.6% in August compared to July, but the increase in gas prices could impact consumer spending during the holiday shopping season, according to a report from the Commerce Department. Excluding gas sales, retail sales only increased by 0.2% in August.
Holiday retail sales are expected to increase in 2023 despite slowing growth, with inflation moderating and e-commerce playing a significant role.
U.S. consumers have significantly reduced their spending over the past six months and plan to continue doing so during the upcoming holiday season, with the majority cutting back on non-essential items and essential items.
US retail sales, excluding automotive, are expected to rise by 3.7% over the holiday shopping season, indicating a return to pre-pandemic levels of holiday spending, driven by a more normal inflation environment and consumers' willingness to spend on experiences, electronics, and dining out.
U.S. business activity remains sluggish in September, with the services sector hovering at its slowest pace since February and new order activity hitting its lowest level of the year, according to a survey by S&P Global, which also indicated that job growth and consumer spending have held steady despite concerns over interest rate hikes and inflation.
Online retailers are projected to offer record-setting discounts this holiday season, with online sales expected to increase by almost 5% from last year, according to Adobe Analytics. Consumers are expected to take advantage of these deals and spend $221.8 billion in online shopping, with toys, electronics, and apparel being the hottest sellers and discounts reaching up to 35% off listed prices.
Retailers are starting their holiday sales events earlier than ever as consumers try to manage high prices, record credit card debt, and the resumption of student loan payments, with experts offering mixed predictions for the holiday season.
Around 74% of American holiday shoppers expect their gift spending to remain steady or increase compared to last year, with 55% anticipating equal spending and 19% planning to spend more, while 26% anticipate spending less, according to a survey by Shopify and Gallup. The survey also revealed that 78% of 18- to 29-year-old shoppers expect to spend at least as much as last year, and online shopping is projected to be popular, with 93% planning to make holiday purchases from online retailers.
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