Retail sales are projected to increase as much as 4.5 percent this holiday season, in line with last year’s gain, as a rise in home prices and decline in joblessness keeps consumers spending.
Total holiday sales are expected to rise to $963 billion to $967 billion, led by non-store sales from online and catalog retailers, Deloitte LLP, a New York-based consulting firm, said today in a statement.
“Rising home prices with steady job creation may buoy consumers,” Daniel Bachman, Deloitte’s senior U.S. economist, wrote in the note.
Unemployment dropped last month to its lowest level since December 2008, while sales of homes rose in August and housing prices have gained 15 percent since last year. Still, many retailers, from Macy’s Inc. to Wal-Mart Stores Inc., missed second-quarter sales estimates and cut forecasts as consumers feeling flush prefer to spend their money on bigger items like cars and home-related products.
“There has been some positive momentum leading into the fourth quarter this year,” Alison Paul, a retail sector leader at Deloitte, said in a phone interview. “The well-heeled, prosperous families continue to be fairly optimistic in spending. Where you’re going to see some of the struggle is in the lower-income and lower-middle class.”
Those lower-income households are restraining purchases as their incomes are restricted by a 2 percentage-point increase in the payroll tax. The proportion of Americans living in poverty in 2012 -- 15 percent-- remained close to a two-decade high and median household income was stagnant, according to a Census Bureau report released Sept. 18.
Holiday hiring by U.S. retailers may fall about 6.9 percent this year amid shaky consumer confidence and as stores implement more efficient practices reducing demand for seasonal workers, according to Challenger, Gray & Christmas Inc. Retailers will hire about 700,000 temporary staff this year, down from 751,800 last year, the Chicago-based employment consulting firm said today in a statement. Last year’s hiring reached a 12-year high and was up 14 percent from 2011, the firm said.
Some retailers have begun announcing holiday hiring plans. Wal-Mart said today that it would boost holiday hiring to 55,000, a 10 percent increase from last year’s 50,000 seasonal hires. Target Corp. said in a post on its website last week last week it would take on about 70,000 workers, 20 percent fewer than year a year earlier.
Non-store retail sales are forecast to climb as much as 13 percent and “continue to surpass overall retail sales growth,” according to Deloitte’s report.
The increase in non-store sales is the smallest since Deloitte began estimating the figure in 2010. The estimate is reined-in from previous years, when the forecasts overshot the actual data, rather than a potential reduction in non-store sales, Paul said.
Mobile-influenced store sales will account for 8 percent, or about $66 billion, of in-store sales this holiday season as shoppers use their smartphones to browse retailers’ sites, conduct product research and compare prices, Deloitte said. Customers using their mobile devices are more likely to make a purchase than other shoppers in the store who aren’t, the firm said. Shoppers who research their purchases online also help to boost in-store sales as retailers further integrate their stores and websites with features like in-store pickup.
Last week, Chicago-based researcher ShopperTrak said sales in stores may advance 2.4 percent in November and December, the smallest increase since 2009 as customers visit fewer stores. Retailers may offer promotions for holiday as early as Nov. 1 to take advantage of the shorter shopping season, ShopperTrak estimated.
This year, there are 25 days between the day after Thanksgiving -- known as Black Friday -- and Christmas, compared with 31 days in 2012, and four instead of five weekends.