In a more skeptical appraisal, KPMG had a less buoyant forecast for the upcoming holidays than some consumer studies, with executives expecting retail sales growth of 4.2% over the 2021 season, within the historical growth range of 3% to 5% but flat to slightly negative when considering inflation.
The business services firm reported that, in its recent survey of 100 retail executives, 75% of respondents said they expect holiday sales to represent up to 40% of their company’s total annual sales. Although 80% of respondents expressed concerns over inventory shortages around the 2021 holiday season, in 2022, 59% anticipate minimal shortages, 30% expect no shortages and only 11% foresee significant shortages.
With high inflation forcing consumers to think more about their spending, retail executives expect the upcoming holiday shopping to be more promotional with 73% of respondents planning to increase promotional activity. Not only that but 21 points of that total represent retailers intending to be much more promotional.
At the same time, a majority of respondents were preparing for a recession in the next 12 months, many believe it will not be too severe and predict it will last less than a year. That being said, 14% said they believe the United States economy already is in a recession. At the same time, 11% expect a recession in three months, 16% expect one in three to six months and 30% see one in six to 12 months. Only 8% expect no recession while 18% expect one in 12 to 24 months and 3% after 24 months.
