US holiday sales will grow at the slowest pace since 2018, according to a Reuters report

(Reuters) – U.S. holiday sales are expected to grow at their slowest pace in six years, data from Deloitte showed on Thursday, as lingering inflation and depleted savings make shoppers more frugal for the busy shopping season importance.

Holiday retail sales are likely to rise between 2.3% and 3.3% between November 2024 and January 2025, totaling to $1.59 trillion, the data report said, up from a 4.3% increase to $1.54 trillion last year.

Sales increased by 3.1% in 2018.

WHY IT’S IMPORTANT

Holiday season sales generally account for more than half of U.S. retailers’ annual revenue.

A shorter season this year — with just 27 days between Thanksgiving and Christmas — has pushed retailers to roll out bigger promotional discounts early in the season.

CONTEXT

Consumers across all income brackets were hit by lower personal savings, which fell to about 3.4 percent in recent months, compared to an average of 3.8 percent in June this year, according to the report.

Customers are expected to start bargain hunting early, looking for additional discounts in various categories, including groceries and home goods, as they tighten their purse strings.

BY NUMBERS

Deloitte expects e-commerce sales to grow in the range of 7%-9% in the 2024 holiday season, totaling up to $294 billion, compared with 10.1% growth to $270 billion last year.

Store sales are expected to rise between 1.3% and 2.1% to $1.3 trillion in the coming holiday season, compared with a 3.1% increase to $1.27 trillion in a year ago

KEY QUOTE

“Rising credit card debt and the possibility that many consumers have depleted their savings from the pandemic will likely influence sales growth this season compared to last,” said Michael Jeschke, Deloitte Consulting Retail & Consumer Products leader.

“Our forecast indicates that e-commerce sales will remain strong as consumers continue to take advantage of online deals to maximize their spending.”