Excited about holiday shopping? This year, consumers are anticipated to increase their spending.

A preliminary report on holiday shopping indicates a moderate rise in retail sales as consumers navigate inflation challenges.

According to Deloitte’s first 2024 Holiday Forecast, retail sales during the holiday season are expected to rise between 2.3% and 3.3% this year.

Holiday Sales Expected to Reach Pre-Pandemic Standards

Deloitte analysts believe sales growth will revert to pre-pandemic levels, reflecting trends from the last ten years. They noted that holiday sales, especially in e-commerce, experienced significant growth following the pandemic.

“This year, we predict a slower growth rate than last year, with a return to more typical growth patterns following the pandemic,” Akrur Barua, an economist at Deloitte Insights, mentioned to YSL News. “Sales are projected to grow between 2.3% and 3.3% this season compared to a 4.3% increase from the previous year.

“Even though disposable income has been rising steadily, it is doing so at a slower rate compared to last year. The conclusion of savings accumulated during the pandemic will also impact consumer spending. Additionally, high credit card debt presents challenges as the holidays approach,” Barua added.

Deloitte predicts total holiday sales will reach $1.58 to $1.59 trillion from November to January. Retail sales (excluding automotive and gasoline) from November 2023 to January 2024 saw a 4.3% growth, totaling $1.49 trillion, according to the U.S. Census Bureau.

Moreover, Deloitte forecasts that e-commerce sales will rise by 7.0% to 9.0% year-over-year, expected to reach between $289 billion and $294 billion this holiday season, compared to a 10.1% growth last year resulting in $252 billion.

Shoppers Seeking Bargains

Consumers are likely to seek out online deals to optimize their expenditures, according to Michael Jeschke, principal at Deloitte Consulting LLP, in a press release.

“While this holiday period shows a return to standard growth levels, retailers that focus on fostering loyalty and trust with consumers could find themselves in a strong position,” Jeschke noted in the release.

Consistent growth in disposable income and a stable job market are both factors that will help bolster retail sales this season. Barua emphasized that while decreasing inflation might reduce the nominal value of retail sales, it is expected to enhance consumers’ purchasing power through real wage growth, which will likely increase sales volumes.

With expected holiday retail sales growth of 2.3% to 3.3%, this is considered solid within the context of a stable, long-term growth trend in the economy. The job market remains robust, household debt levels relative to disposable income are low, and the total financial assets of households have risen by 30% since the last quarter of 2019, all supporting consistent retail sales growth this holiday season,” Barua explained.

The holiday shopping period has already started, with nearly half (48%) of participants in a recent Bankrate survey stating they plan to start their gift shopping by October.

Betty Lin-Fisher is a consumer reporter for YSL News. You can find her on X, Facebook, or Instagram @blinfisher.