Retail sales during the holiday season in 2017 will increase up to 4% to $682 billion, although companies will hire fewer workers in November and December, according to the National Retail Federation (NRF).
NRF’s forecast reflected the “very realistic steady momentum” of the U.S. economy and the industry’s overall strength, said NRF CEO, Matthew Shay. In 2016, total retail sales for the same period amounted to $655.8 billion.
Shay attributed the expected increase in retail sales to a longer shopping season, as this year’s Christmas would be 32 days away from Thanksgiving, as compared to 31 days in 2016. The extra day will allow businesses to empty their stockpiles further. A high level of consumer sentiment also played a role in the anticipated growth.
NRF chief economist Jack Kleinhenz believes that this level of confidence will be crucial to the economy, as consumers account for most of its growth. Americans expect to spend more due to a better job climate, higher salaries and net worth, as well as steady inflation, according to Kleinhenz. For businesses, especially for online retailers, the need to invest in a price tracking tool and other competition-driven resources becomes more relevant.
E-commerce sales between November and December 2017 would increase up to 16% to an estimated $114 billion, Shay noted. He added that online sales would increase at a faster rate than traditional retail sales.
However, retail companies intend to downsize their seasonal hiring spree due to some sales that would be made online. NRF said that some companies would only hire between 500,000 and 550,000 seasonal workers for 2017, down from 575,000 workers last year.
Retail companies should prepare for an anticipated increase in holiday sales by investing in competitive intelligence tools, which will allow them to monitor how their rivals plan to do business in the last few months of 2017.