Will Holiday Sales Really Be That Robust This Year?

Is the economy really improving?

Economists might think so, but most retailers might tend to disagree with that assessment — setting up a very interesting holiday shopping season.

The “experts” are forecasting some of the biggest holiday shopping by consumers in years, but what if those sales numbers don’t actually materialize this year?

If holiday sales are robust this year, it would mark a drastic turnaround from the beginning of the year. Only 49 percent of retailers said sales at established locations rose during the second quarter this year compared to a year earlier, which is the lowest amount since 2009 when the U.S. was still mired in the Great Recession, according to retail research firm Retail Metrics.

And sales growth in general has been stuck in the 1–2 percent range for years, according to Retail Metrics President Ken Perkins.

So then, why, despite all signs seemingly pointing to the contrary, are economists forecasting such rosy holiday sales this year?

The National Retail Federation (NRF) said last week that it expects holiday sales to rise 3.6 percent this year, with a 7–10 percent gain in non-store sales fueled largely through online purchases. It’s worth noting, according to Internet Retailer, that the NRF has overshot its holiday projections each of the past four years.

But the NRF is not the only one predicting a very merry Christmas for retailers this year. Consultancy firm PricewaterhouseCoopers believes holiday sales will grow about 10 percent this year, while the International Council of Shopping Centers (ICSC) predicts a 3.3 percent jump in holiday sales this year at physical stores.

All these predictions are setting up an interesting showdown, and ultimately, only time will tell if consumers are really feeling as good about the economy this year as economists seem to think that they are.

It might not be as merry a Christmas as some are expecting.