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Holiday Shopping

Back in September, Barataria speculated that this could wind up being a great holiday shopping season. That was before the shutdown and awfully early in the year to be sure of anything. A month later, the pros are weighing in on holiday sales and the predictions are generally all over the board. Growth of between 2.3% and 4.5% over 2012 is predicted by an array of professional organizations, so you can take your own guess.

This is important for retail outlets, where holiday sales amount to about 20% of annual sales. It’s practically a “fifth quarter,” and a very key part of the US Economy. A good holiday season should accelerate job growth and set up even more in 2014. So, once again we ask, “How good will it be?”

The look of desperation is totally unnecessary.  Really.

The look of desperation is totally unnecessary. Really.

Let’s start with the baseline. Holiday sales in 2012 (above normal monthly sales) were $579.5B in the US, again about 20% of all retail sales in 2013. A bit over 9% of that came online, or $54.5B – which seems like an insignificant amount, but it consistently represents the fastest growing part of the equation.

The National Retail Federation (NRF) sees an increase of 3.9% this year to $602.1B overall. This would be the highest rate of increase since 2007, and a good jump over the 3.5% growth seen in 2012. Deloite LLC, a consulting firm, sees an even bigger increase of 4.5%, which would be amazing. ShopperTrac, which as its name suggests tracks consumers with surveys, sees a much smaller 2.4%.

So let’s call the midpoint about 3.6%, which is to say about the same as 2012. That’s not that great looking after all. What we will have to watch are sales in early November to see if they are tracking much higher than last year or about the same. Chanukkah comes as early as possible this year, 10 days before Thanksgiving, so it may tell us something about the season.

It's growing faster, it's sexier, but people really are just guessing.

It’s growing faster, it’s sexier, but people really are just guessing.

Online sales are expected to grow by about 15% by just about everyone, however. It’s such a round number that it’s hard to say where anyone got it or if it means anything.

Macy’s has already announced that they will open at 8PM on Thanksgiving Day. They’re not even going to wait for their own damned parade.  As important as retail sales are and while there are many fun stories of people shopping together as a family on “Black Friday”, I remain disgusted by the destruction of one of our nation’s great holidays. Oh well.

The other very important part of holiday shopping is holiday hiring, which we already know is going to be pretty thin this year. Last year 720k seasonal temps were hired, and the NRF predicts that in 2013 there will be between 720k-780k. The range and starting point is big enough to sound like a rough guess. Challenger, Gray, & Christmas, which despite its name is an accounting firm that follows jobs, sees a decline in employment to 700k.

Target has announced that they are hiring 70k more workers, down from 84k last year, but WalMart will hire 55k, up from 50k last year. Based on early news we can’t tell if there is a trend yet.

With one month left to gear up and two months left in the season, holiday sales this year are incredibly hard to predict, at least if you go by the experts. But that simply means that it’s a great story in the works for whoever makes the right call first.  We will stay on it to see.

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10 thoughts on “Holiday Shopping

  1. Weren’t you going to wait for more data before calling the effect of the shutdown? It seems very premature at this point to speculate on the holiday season until we know more. I appreciate what you have here but given the wide range I wouldn’t want to bet anything on this season.

    • I wanted to use this as a baseline before we had any data – it seemed as though I couldn’t wait until too close to Halloween this year. But yes, I want the September jobs report at least before I’ll have any idea at all. I’ll come back to this in a month to see where it seems to be heading.
      Remember, last year at this time we were dealing with Hurricane Sandy. This really should b e a better year without a lot of push.

  2. It would be so much better if we didn’t have to worry about shopping excess at Christmas to keep retailers afloat. Buying local keeps the money you spend in the community and helps retailers who have bravely decided to be independant survive. It’s the right thing to do AND you usually find unique gifts that you will never find at WalMart. Buying local is definately the way to go!

    • Yes on all counts. However, large or small, this is a huge part of the economy and a good holiday season is what’s left to frost the cake that is the good set of stats we’ve had all year. Assuming, of course, that the jobs, real estate, and consumer confidence data continue to look good after we see the effects of the shutdown. I think they will.

  3. As part of the holiday season, which runs from Halloween to New Year’s Day, we should sample different beers and ales every day. Just like the German and Irish immigrants used to. And also we should try different teas, in honor of the redoutable Tea Party.

    • I am in favor of different teas. My favorites are Twinings Prince of Wales (really a Qimon) and Tie Guan Yin, the Iron Goddess of Mercy. But if you’re springing for a shipment of loose tea from Twinings, be sure to get some of their Christmas Tea – really good. 🙂

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