- Advertisement -

Retail spending growth is expected to slow over the 2022 holiday season as higher spending continues to weigh on consumer budgets, according to a new Deloitte forecast.

- Advertisement -

However, these higher costs are expected to spark e-commerce sales as more consumers look for deals online “to maximize their spend,” according to Nick Handrinos, vice chairman of Deloitte.

From November to January, Deloitte forecasts that retail sales will grow by 4-6%, well below the 15.1% growth over the same period last year.

- Advertisement -

RETAIL SALES IN JULY ARE DEALING WITH NEEDS INDICATORS

Meanwhile, according to a Deloitte report, e-commerce sales are estimated to grow 12.8% to 14.3% year-over-year. Last holiday season, e-commerce sales grew 8.4%.

As a result, according to Deloitte, holiday e-commerce sales are likely to hit $260 billion to $264 billion this year, according to Deloitte.

While consumers will no doubt shop in the gift season, their habits will change due to painfully high inflation.

The lower projected growth in store retail sales this season “reflects a slowdown in the economy this year,” said Daniel Bachman, economic forecaster for Deloitte in the US.

While inflation will continue to boost dollar sales, “retailers will see less volume growth,” Bachman added.

ONLINE PRICES RISE IN AUGUST AS FOOD AND CLOTHING BECOME LEADERS

bloomingdales

However, retailers that “remain consumer-driven and offer convenient and affordable options could do well this season,” Handrinos said.

Even before the start of the holiday season, retailers were facing overstocking issues due to inflated prices and reduced demand.

It’s a problem that major retailers including Macy’s, Nordstrom, Kohl’s and Walmart have highlighted in recent calls to investors. To solve this problem, retailers are introducing additional discounts before the holidays to get rid of unwanted goods.

Meanwhile, arts and crafts retailer Michaels isn’t worried about overstocking and told FOX Business last month that it regularly sees its holiday stock sell out.

“The reaction to our Halloween merchandise, which began hitting stores in August, is an early indicator of demand this year,” Michaels COO Joe Venetia told FOX Business.