SalesTech Star

Bain & Company Forecasts Us Retail Sales to Grow by 3% This Holiday Season, the Lowest Holiday Growth Rate Since 2018

Adjusting for inflation, Bain projects real US holiday retail sales growth to be well below the 10-year average and the lowest real sales growth since the financial crisis

Bain & Company forecasts nominal US retail sales to slow this holiday season, with the lowest growth rate since 2018. Unadjusted seasonal sales are expected to grow 3.0% year-over-year (YoY) in November and December, reaching nearly $915 billion, with 90% of the growth coming from nonstore (e-commerce and mail-order) sales. However, adjusting for inflation, real US holiday retail sales growth will be sluggish at just 1.0%, well below the 10-year average and the lowest real sales growth since the financial crisis. Bain explores this and other insights for the upcoming holiday season in its annual Retail Holiday Newsletter series.

According to Bain & Company’s analysis, US retail sales have been relatively slow in 2023, up 4.0% YoY, on a nominal basis. Bain found that growth has largely come from e-commerce, along with select in-store categories, such as health & personal care, general merchandise, and food & beverage. Other in-store categories have decelerated over the past few months, with some categories declining in overall sales. As the holiday season approaches, retailers will continue to face economic challenges stifling holiday sales this November and December, with shoppers allocating more to costly non-discretionary spending.

Read More: Gong Introduces Call Spotlight to Deliver Relevant, Secure and Accurate Generative AI-Based Insights and Next Steps for Revenue Teams

“Retailers are facing new challenges this year and are overcoming headwinds from higher interest rates amid increasing debt,” said Aaron Cheris, head of Bain & Company’s Americas Retail practice. “That being said, several tailwinds may boost holiday retail growth with prices remaining elevated as compared to last year, even as inflation slows. Retailers are continuing novel, targeted marketing approaches, using technologies like generative AI and livestreaming.”

While e-commerce and mail ordering continue to accelerate, in-store sales growth has slowed in recent months, and inflation has decreased spend across categories. Bain expects shoppers to pull forward more holiday spending this year, including during October sales, and the firm predicts holiday sales may benefit from greater consumer spending power, as wages, disposable income, and stocks all up relative to last year.

“Savvy retailers will start early and lead with value messaging—both in terms of price and quality—employing positive commonalities to appeal to potentially cautious consumers this holiday season,” said Sarah Irizarry, associate partner in Bain & Company’s Retail practice. “Winners will continue to invest amid challenges and focus on new solutions that personalize their offerings and improve overall customer service.”

Read More: Internal and External Challenges Salespeople Face: Changing Approaches and Solutions

Write in to psen@itechseries.com to learn more about our exclusive editorial packages and programs.

Brought to you by
For Sales, write to: contact@martechseries.com
Copyright © 2024- SalesTechStar. All Rights Reserved. Website Design:SalesTechStar | Privacy Policy
To repurpose or use any of the content or material on this and our sister sites, explicit written permission needs to be sought.