As it evaluates gift-giving season, Coresight Research has estimated that total retail sales in the United States will increase by about 5% year over year during the holiday period, boosting total October through December sales to $1.1 trillion.
The market research firm identified five factors that support its estimate:
- Food demand at retail will be strong, up by 9% to 9.5% year over year.
- A potential multibillion-dollar switch from services to products could occur as consumers face reduced options for spending in an environment still affected by the COVID-19 pandemic.
- Shoppers seem to be trading up to more premium products.
- Tens of billions of dollars in pent-up spending could flow into retail.
- Earlier holiday shopping in October could generate more spending as consumers keep on spending through to year’s end.
However, Coresight also identified three holiday spending wild cards:
- Uncertainty could hit consumer confidence and propensity to spend, so any lack of certainty or dispute around the November election result could drag on holiday spending.
- Consumer spending on retail categories could weaken more substantially than expected in the absence of any further stimulus payments.
- As retailers implement social-distancing measures on sales floors, store capacity could become a constraint on brick and mortar shopper spending this year.