Christmas just came early!
The National Retail Federation Holiday Sales 2018 Forecast came today and it’s good news. The NRF expects November and December 2018 holiday retail sales to increase between 4.3% and 4.8% over 2017 for a total of $717.45 billion to $720.89 billion. This forecast bests the 3.9% five-year annual average increase. NRF figures exclude automobiles, gasoline and restaurants.
CRUCIAL HOLIDAY PERIOD
Considering how crucial the holiday period is to the fashion retail industry, the NRF forecast comes as good news.
In 2017, clothing stores saw 22.1% ($42.2 billion) of their annual sales come from the holiday period; jewelry stores saw 28.1% ($9.1 billion), and department stores (excluding discounters), saw 26.9% ($14.6 billion).
Holiday sales in 2017 totaled $687.87 billion, a 5.3% increase over the year before and the largest increase since the 5.2% year-over-year gain seen in 2010 after the end of the Great Recession. The 2018 holiday forecast is consistent with NRF’s projections that annual retail sales for 2018 will increase at least 4.5% over 2017.
“Our forecast reflects the overall strength of the industry,” NRF President and CEO Matthew Shay said. “Thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we’ve seen over the past year. While there is concern about the impacts of an escalating trade war, we are optimistic that the pace of economic activity will continue to increase through the end of the year.”
CONSUMER CONFIDENCE AT A HIGH
“Last year’s strong results were thanks to growing wages, stronger employment and higher confidence, complemented by anticipation of tax cuts that led consumers to spend more than expected,” NRF Chief Economist Jack Kleinhenz said. “With this year’s forecast, we continue to see strong momentum from consumers as they do the heavy lifting in supporting our economy. The combination of increased job creation, improved wages, tamed inflation and an increase in net worth all provide the capacity and the confidence to spend.”
There is also good news for seasonal workers.
Even with the increasingly tight labor market, retailers have been preparing for their busiest season of the year by hiring extra staff to help meet the demand expected during November and December. As part of its forecast, NRF expects retailers to hire between 585,000 and 650,000 temporary workers this holiday season, up from last year’s 582,500.
NRF’s holiday forecast is based on an economic model using several indicators including consumer credit, disposable personal income and previous monthly retail sales. The number includes online and other non-store sales. For historic sales information visit NRF’s Holiday Headquarters.