Deloitte: Retail holiday sales to increase by at least 4%
An uptick in consumer spending could drive sales as high as $1.05 trillion this holiday season.
Retail holiday sales should rise a healthy 4% to 4.5% over last year's shopping season — a factor that could drive sales between $1.04 trillion and $1.05 trillion between November 2017 and January 2018, according to the annual retail holiday sales forecast from the firm’s retail and distribution practices. (Holiday sales are seasonally adjusted, and exclude motor vehicles and gasoline.)
There will also be an 18% to 21% increase in e-commerce sales during the 2017 holiday season, compared with 2016. Overall, e-commerce sales are expected to reach between $111 billion and $114 billion during the holidays.
"The projected uptick in holiday sales ties to four primary factors affecting consumer spending, starting with anticipated strong personal income growth," said Daniel Bachman, Deloitte's senior U.S. economist.
"Last year, disposable personal income grew 2% over the year to the holiday period, and we may see that rise to a range of 3.8% to 4.2% this season,” he said. “Consumer confidence remains elevated, the labor market is strong and the personal savings rate should remain stable at its current low level.”
Of course, potential uncertainties could affect income growth and bring the forecast in at the lower end of the range. Among the biggest factors are an increase in the savings rate that would cause spending to expand more slowly. Another is the threat of a government debt ceiling crisis – which has loomed over prior holiday seasons – which could also cut employment and income growth.
The impact of the unusually active hurricane season remains too early to project. However, it could depress spending or increase it, particularly in the home improvement sector, due to rebuilding activity, according to the study.
"Sentiment and spending indicators are firing on all cylinders, but the question is: How will retailers respond given the profound disruption across the industry?" said Rod Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader. "The good news is retail is thriving, and it is the proliferation of new, niche retailers that is resulting in share constantly changing hands.
Faced with unlimited alternatives, consumers continue to bounce between brands, touchpoints and influencers throughout their shopping journey. This makes it increasingly difficult for retailers to attract shoppers without some level of customization.
“These disruptive factors are likely to combine to create a highly competitive and promotional holiday season, according to Deloitte,” Sides added. “Retailers should modify their assumptions about what drives traffic, engagement and holiday sales growth, and realign around customer experience, creating relevant, emotional and inspirational connections that go beyond just product, price and assortment."
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Discount giant now lets customers use food stamps to pay for online orders
Walmart customers that receive government assistance can now shop for food online.
The discount giant is allowing customers enrolled in the Supplemental Nutrition Assistance Program (SNAP) — the formal term for food stamps — to place online orders. However, the program does come with one loophole.
Federal guidelines require SNAP members to pay for their food in person. To adhere to this requirement — and still enable customers to take advantage of its online ordering and pickup service — the discounter allows shoppers to use their food stamps to pay for their transaction when they retrieve their order at their store’s Online Grocery Pickup location.
Currently, the service is being tested in one store in the Houston area and four location around Boise, Idaho. Walmart plans to expand to “more markets through the holiday season and beyond,” Mike Turner, Walmart’s VP of e-commerce operations, said in the company’s blog.
“Everyone deserves this kind of satisfaction,” he said. “Convenience shouldn’t be dictated by the way you pay.”
This is the newest program that benefits customers using electronic benefits transfer, or EBT, to pay for their food purchases. In August, Albertsons joined a two-year pilot program that enables SNAP participants to shop online and have their groceries delivered. The service is available in Albertsons' Maryland, Oregon and Washington State divisions.
Meanwhile, in June, Walmart’s online rival Amazon announced that individuals participating in EBT government assistance programs can sign up for a Prime membership at the discounted rate of $5.99 per month. The regular annual membership for Prime is $99 per year, or $10.99 a month for those who prefer to pay monthly.
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