October 15, 2019 Comments Off on ICSC, NRF Foresee Much Stronger 2019 Holiday Season, Amid Concerns Views: 862 Connect Classroom, National News

ICSC, NRF Foresee Much Stronger 2019 Holiday Season, Amid Concerns

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By Dennis Kaiser

Forecasts from two retail industry groups predict a strong 2019 holiday shopping season. New York-based ICSC’s Holiday Shopping Intentions Survey forecasts a 4.9% increase in holiday spending over last year for a total of $832.3 billion, with the average adult spending $683 on holiday-related items. Meanwhile, the Washington, D.C.-based NRF expects holiday retail sales during November and December to increase between 3.8% and 4.2% over 2018 to a total of between $727.9 billion and $730.7 billion.

NRF President and CEO Matthew Shay says, “The U.S. economy is continuing to grow and consumer spending is still the primary engine behind that growth. Nonetheless, there has clearly been a slowdown brought on by considerable uncertainty around issues including trade, interest rates, global risk factors and political rhetoric. Consumers are in good financial shape and retailers expect a strong holiday season. However, confidence could be eroded by continued deterioration of these and other variables.”

NRF’s numbers, which exclude automobile dealers, gasoline stations and restaurants, compare with an average holiday sales increase of 3.7% over the previous five years.

ICSC found that physical stores remain crucial to the success of the holiday shopping season, with 90% of U.S. adults planning to shop in-store for gifts and other related goods. An overwhelming 97% of holiday shoppers plan to shop with a retailer that has a physical presence and 82% of those consumers are likely to make an additional purchase in-store while picking up their online purchase, reports ICSC.

“Our annual Holiday Shopping Intentions Survey once again shows that consumers are not only optimistic about the upcoming holiday season, but also continue to favor physical stores when shopping for gifts,” said Tom McGee, president and CEO of ICSC. “Consumers expect convenience and experience when shopping which means that those retailers with a good omnichannel strategy will likely see success this holiday season.”

NRF expects online and other non-store sales, which are included in its total, to increase between 11% and 14% to between $162.6 billion and $166.9 billion, up from $146.5 billion last year.

The majority of holiday shopping will take place between Thanksgiving and Christmas Day. In fact, 86% of shoppers plan to complete their shopping during that time period, ICSC found. Additionally, nearly 60% of holiday shoppers plan to shop over Thanksgiving weekend with that number jumping to 73% for Millennial shoppers. Again, this year, promotions will drive in-store visits, with more than 60% of shoppers saying that searching for deals encourages them to make more trips to physical stores, said ICSC.

Topping the list of items shoppers will purchase this year are gift cards (63%), apparel/footwear/accessories (55%), toys/games (48%) and food/alcohol (43%), reports ICSC. Holiday shoppers planning to buy electronics plan to spend most on video games/consoles (53%) and smartphones/accessories (50%). For children aged up to 12, the expectation is that 92% will ask for toys this year, and for those ages 13-19, gift cards are the gift of choice (61%), according to ICSC.

The ICSC survey also found that 87% of shoppers plan to research online before going to stores, and 82% of shoppers who have a mobile device will use it in-store to compare prices, get digital coupons and check inventory.

Looking at the impact of tariffs on holiday spending — either directly or through consumer confidence — NRF notes it remains to be seen how it will play out this year. Some holiday merchandise — including apparel, footwear and televisions — is subject to new tariffs that took effect September 1, and other products will have the tariffs applied on December 15. Retailers are using a myriad of mitigation tactics to limit the impact on consumers, and the impact will ultimately vary by company and product, notes NRF. Small businesses, in particular, have already been forced to raise prices. Nonetheless, 79% of consumers surveyed for NRF in September were concerned that tariffs will cause prices to rise, potentially affecting their approach to shopping.

“There are probably very few precedents for this uncertain macroeconomic environment,” NRF Chief Economist Jack Kleinhenz said. “There are many moving parts and lots of distractions that make predictions difficult. There is significant economic unease, but current economic data and the recent momentum of the economy show that we can expect a much stronger holiday season than last year. Job growth and higher wages mean there’s more money in families’ pockets, so we see both the willingness and ability to spend this holiday season.”

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For comments, questions or concerns, please contact Dennis Kaiser

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