Retail holiday sales forecast to grow 4.5%

Print Friendly, PDF & Email

Two-thirds of sales growth expected from online purchases

WASHINGTON — FTI Consulting Inc.’s 2017 U.S. Holiday Retail Forecast projects 4.5% growth in discretionary holiday spending, an increase from 3.3% during the 2016 season.

The macroeconomic environment entering the 2017 holiday season is the most favorable since the Great Recession of 2008-2009, which will drive the forecasted spending increase, according to FTI Consulting’s Retail and Consumer Products practice.

Favorable factors for 2017 holiday retail sales include multi-year highs for most measures of consumer confidence, the continued appreciation of home prices, a healthy labor market and low relative energy prices for consumers.

However, sales growth will disproportionately benefit online sellers. Two-thirds of the projected overall sales gain this season will go to the online channel, including omnichannel, according to the forecast, while in-store sales will capture approximately one-third of this growth.

That translates to sales growth in the mid-teens or better for the online channel compared to last holiday season, while in-store sales will increase between 1% and 1.5% compared to last season.

“Continued growth in the online channel and its disruptive impact on how we shop has created an existential crisis for retailers,” Christa Hart, a senior managing director in the Retail and Consumer Products practice at FTI Consulting said in a statement.

“This is not a fad that will pass. Millennials are now the largest age demographic, and soon they will be entering their peak earning years. They do not view malls or stores as their preferred places of commerce or social gathering spots like previous generations did, and this is a formidable obstacle for retailers to overcome.”

Increasing online sales at the expense of in-store purchases during the holiday season is similar to the overall trend in the U.S. retail sector. According to FTI Consulting’s recently released 2017 U.S.

Online Retail Forecast, approximately 60% of total U.S. retail sales growth has gone to the online channel in the past year, compared to 40% as recently as 2014.

In addition, the 2017 U.S. Online Retail Forecast found that stores, which currently account for 85% of U.S. retail sales (excluding auto, gas and food), have claimed less than 50% of total sales growth since 2016.

“Not only is the online channel capturing a large majority of total sales growth generally, but consumers tend to shop online even more than usual during the holiday season, as they can avoid the stress of traffic and weather to make their purchases,” added Khaled Haram, a senior managing director in the Retail and Consumer Products practice at FTI Consulting. “While consumers may be more upbeat this season, only select retailers may be beaming at the end of the year.”


Adheris Health

Comments are closed.

Adheris Health