Sept 19 (Askume) – U.S. retail sales are expected to rise 3.2% during the holiday season, according to a Mastercard forecast, as companies seek to appeal to frugal shoppers and look for deals during this year’s shorter-than-usual shopping period.
In comparison, according to a report by Mastercard Economics, retail sales are expected to grow 3.1% between Nov. 1 and Dec. 24, 2023. Mastercard SpendingPulse measures in-store and online retail sales across all types of payments except car sales.
Why is this important?
As consumers are expected to make smart decisions about their spending this year, companies ranging from Walmart (WMT.N) and Target (TGT.N) to Amazon (AMZN.O) and China’s Shein and PDD Holdings will all be owned by retailers. PDD ( O ) Temu could make an aggressive deal .
“Inflation continues to decline, and consumers increasingly expect and demand promotions and discounts. Discounts and promotions are no longer just ‘nice to have’; they are necessary,” the report said.
Because of the shorter shopping season this year — just 27 days between Thanksgiving and Christmas — retailers may be forced to offer deeper discounts at the start of the season.
Deloitte estimates that US holiday sales growth is expected to be the slowest in six years.
By number
Online sales during the holiday season are expected to grow 7.1% compared to last year, Mastercard reports.
Spending on large electronics, including TVs and laptops, is likely to grow by 6.7%, driven by lower borrowing costs, cheaper prices and replacement of older devices bought during the pandemic, according to forecasts.
Earlier this week, electronics retailer Best Buy (BBY.N) said it would launch a holiday promotion program for its members at the end of the month .
situation
Heading into the crucial holiday season, the Fed on WednesdayThe expected series of interest rate cuts began, with a massive 50 basis points cut .
This will begin to ease some of the financial stress felt by consumers over the last two and a half years , as the central bank battled high inflation.
Meanwhile, consumer spending remains resilient , with US retail sales unexpectedly rising in August thanks to strength in online shopping.
According to government data , wages in the labor market are expected to continue to rise, which will support consumer spending and the overall economy .
Figurative
