As 2021 winds down, Deloitte has released its annual holiday retail forecast, projecting strong growth spurred by elevated consumer spending on services and continued growth in e-commerce sales even as the COVID-19 Delta variant creates uncertainty.
E-commerce sales should grow by 11% to 15%, year-over-year, Deloitte noted, reaching between $210 billion and $218 billion this holiday season versus $189 billion in the period last year.
Deloitte’s retail and distribution team expect an increased spend on services, the market research and business services firm stated, including restaurants and travel, with spending on goods holding steady. However, that may change as consumer health and safety concerns affect spending.
Daniel Bachman, Deloitte’s U.S. economic forecaster, pointed out that holiday sales in 2020 came in higher than expected, growing by 5.8%. So, the 2021 forecast projects a strong growth rate amid already elevated retail sales plus likely flat growth in disposable personal income heading into the season. That being said, the Delta variant and ongoing uncertainty spurred by the pandemic may drive spending away from services and towards goods.
“We anticipate strong consumer spending for the upcoming holiday season,” he said in announcing the forecast. “As vaccination rates rise and consumers are more comfortable being outside of the home, we are likely to see increased spending on services, including restaurants and travel, while spending on goods will continue to hold steady. A steady decline in the savings rate to pre-pandemic levels will support consumer spending and keep retail sales elevated this season. Further, e-commerce sales will continue to grow as consumers demonstrate an ongoing and steady movement toward buying online across all categories.”
Rod Sides, vice chairman, Deloitte, and U.S. retail and distribution sector leader, said, “Across channels, retailers should expect a strong holiday season as consumer spending levels are projected to remain high. While consumer concerns about health and safety have eased since the last holiday season, pandemic-influenced shopping behaviors continue to gain traction. Retailers who remain resilient to shifting consumer behaviors and offer convenient options for online and in-store shopping, as well as order fulfillment, will be poised for growth this holiday season, and into the new year.”
