New York—Holiday retail sales growth in 2022 will pale in comparison to last year’s strong numbers, according to Deloitte’s annual holiday retail forecast.
Sales for the season are expected to increase 4 to 6 percent year-over-year to $1.47 trillion.
In the same period last year, from November to January, holiday sales soared 15 percent over the year prior to $1.39 trillion.
The lower projected growth is a reflection of the slowdown in the economy this year, said Daniel Bachman, Deloitte's U.S. economic forecaster.
"Retail sales are likely to be further affected by declining demand for durable consumer goods, which had been the centerpiece of pandemic spending,” he said.
Spending on consumer services, like restaurants, is expected to grow as pandemic restrictions ease.
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Inflation should raise dollar sales, but retailers will likely see less growth in sales volume, he added.
The consumer price index (CPI), which measures the average change in prices over time consumers will pay for a basket of goods and services, rose 0.1 percent month-over-month in August
and 8.3 percent year-over-year.
Economists had expected CPI to fall 0.1 percent month-over-month, especially since energy prices were down, but a rise in food and shelter costs offset that decline.
"As inflation weighs on consumer demand, we can expect consumers to continue to shift how they spend their holiday budget this upcoming season," said Nick Handrinos, vice chair, Deloitte LLP, and U.S. retail, wholesale and distribution and consumer products leader.
E-commerce sales, notably, are expected to put on an even stronger performance this year, forecast to grow 12 to 14 percent with sales between $260 billion to $264 billion.
In 2021, e-commerce sales grew 8 percent to $231 billion.
"Retail sales are set to increase as a result of higher prices, and this dynamic has the potential to further drive e-commerce sales as consumers look for online deals to maximize their spending,” said Handrinos.
“Retailers across channels who remain aligned with consumer demand and offer convenient and affordable options can be well positioned for success this season."