Retailers Anticipate Improved Sales for 2014 Holiday Season
While holiday displays and merchandise starting popping up in some stores as early as August this year, retailers are officially bracing for big business now that the holiday season is ramping up in earnest.
Nationwide, holiday retail sales are expected to increase 4.1 percent over last year, to a total this year of $616.9 billion, according to the National Retail Federation (NRF).
If the prediction holds true, it would be the first increase of more than 4 percent since 2011, according to the trade group. On average, holiday sales have grown 2.9 percent per year over the past 10 years. In 2013, sales rose about 3 percent over 2012’s total.
“Retailers could see a welcome boost in holiday shopping, giving some companies the shot in the arm they need after a volatile first half of the uneventful summer,” NRF President and CEO Matthew Shay said in a statement.
The NRF describes “holiday sales” as retail sales made during November or December, excluding gas, car and restaurant purchases.
While forecasts are optimistic, consumers remain anxious when it comes to spending, Shay added. “The lagging economic recovery, though improving, is still top of mind for many Americans,” he said, and many shoppers are on the hunt for deals.
A popular day for bargain hunters is Black Friday, which this year is Nov. 28. The day after Thanksgiving usually is the biggest single shopping day of the year, when retailers typically become profitable — or “in the black” — for the year.
Many shoppers will get an even earlier jump on shopping by heading out on Thanksgiving. This year a growing number of malls and stores will open for part or all of Thanksgiving Day — a controversial move but one that can be very profitable for retailers if last year is any indication.
In 2013, nearly 45 million consumers shopped on Thanksgiving, according to the NRF. That’s a 27 percent increase from 2012. About two-thirds of all shoppers headed out to stores either on Thanksgiving or by 10 a.m. on Black Friday.
In all, about 250 million people nationwide shopped in stores and online over Thanksgiving weekend last year, up a slight 0.5 percent over 2012, according to the NRF.
Connecticut shoppers who have the urge to hit the stores on Thanksgiving will have plenty of options as malls and shops throughout the state plan to open. Westfarms in Farmington, Westfield Connecticut Post in Milford, and Westfield Trumbull, for instance, all plan to open their doors at 6 p.m. on Thanksgiving Day.
Other shopping-themed days also aim to lure consumers. Small Business Saturday urges consumers to shop local, independent retailers on the Saturday after Thanksgiving and Cyber Monday brings a slew of deals from online retailers on the Monday following Thanksgiving.
Christmas, Hanukkah, and other holidays are big business for retailers. This year, holiday sales are expected to account for 19 percent of the industry’s $3.2 trillion in total annual sales, the NRF forecasts.
Many of those sales will be made online. NRF expects online sales to grow between 8 and 11 percent over last year’s holiday season, to a total of up to $105 billion.
Those who shop online plan to spend more than their brick-and-mortar counterparts, too. Online shoppers expect to spend 16 percent more during the holiday season than all other shoppers. They each expect to spend an average of $931.75, the NRF found, and the most preferred way for digital shoppers to spend is via their mobile devices.
So far, it seems many shoppers are holding out for bigger sales and discounts as the holidays approach. As of last week (Nov. 12), 46 percent of shoppers said they hadn’t yet started their holiday shopping, according to an NRF survey. Just 2 percent said they are done with their shopping, 21 percent had done 10 percent or less, and 12 percent were done with about a quarter of their shopping.
As usual, clothes, toys and video games are shaping up to be the most popular gifts this year. Among holiday shoppers, 61 percent plan to buy clothing and accessories; 46 percent will buy books, CDs, DVDs, and video games; and 42 percent will shop for toys. The NRF also found 24 percent of shoppers plan to buy jewelry, the highest percentage in that category since 2006.
For the eighth year running, gift cards are the most requested gift with 60 percent of those surveyed saying that’s what they hope to receive.
In deriving its holiday retail forecasts, the NRF takes certain economic indicators into account, such as consumer credit, disposable personal income and monthly retail sales from earlier in the year.