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Deloitte forecast: Retail holiday sales to increase 4 to 4.5 percent

Digital interactions expected to influence 50 percent of retail store sales; Non-store sales to rise 13.5 to 14 percent

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Courtney Flaherty
Deloitte
Public Relations
+ 1 203 905 2708

New York, September 24, 2014 ― Steadily improving economic fundamentals should moderately boost holiday sales in the stores and online this year, according to Deloitte’s annual holiday sales forecast.

“Income, wage and job growth are positive indicators heading into the holiday season,” said Daniel Bachman, Deloitte’s senior U.S. economist. “Debt levels remain at historical lows and stock market gains coupled with increasing home prices have a wealth effect on consumers, which may encourage increased spending compared with prior years. Although consumers are watching tensions unfold in the Middle East and Ukraine, the improvement in their economic situation should more than offset the foreign conflicts’ impact on consumer confidence and retail sales. Despite recent events in energy-producing areas of the world, gas prices have held steady, which may also sustain consumers’ spending power.”

Deloitte’s retail and distribution practice expects total holiday sales to climb to between $981 and $986 billioni, representing a 4 to 4.5 percent increase in November through January holiday sales (excluding motor vehicles and gasoline) over last season. This growth rate is a moderate improvement over last year’s 2.8 percent gain. Additionally, Deloitte forecasts a 13.5 to 14 percent increase in non-store sales in the online and mail order channelsii during the 2014 holiday season.

“While online sales continue to climb, digital customer interactions through both virtual and physical store channels present greater sales opportunities than online or mobile commerce alone,” said Alison Paul, vice chairman, Deloitte LLP and retail and distribution sector leader. “Our research indicates that 84 percent of shoppers use digital tools before and during their trip to a store. Additionally, those shoppers convert or make a purchase, at a 40 percent higher rate than those who do not use such devices during their shopping journey.”

Deloitte forecasts that digital interactions will influence 50 percent or $345 billioniii, of retail stores sales this holiday season. This figure reflects the extent to which consumers’ use of desktop and laptop computers, tablets and smartphones influence brick-and-mortar store sales.

Paul noted, “Retailers should focus on the right functionality, rather than more functionality, when creating digital experiences this holiday season. Rather than offer their full e-commerce site on a mobile device, for example, retailers may be more effective by helping consumers compare prices, scan through local assortments and navigate the store. Retailers that better understand how consumers make purchasing decisions, then deliver tools that support that process in a way that is consistent and complementary across online, mobile and store channels — may have the advantage this holiday season.”

About Deloitte’s Retail and Distribution Practice
Deloitte is a leading presence in the retail and distribution industry, providing audit, consulting, risk management, financial advisory and tax services to more than 75 percent of the Fortune 500 retailers and distributors. With more than 2,400 professionals, Deloitte’s retail and distribution practice provides insights, services and solutions assisting retailers across all major subsectors including apparel, grocery, food and drug, wholesale and distribution and online. For more information about Deloitte’s retail and distribution sector, please visit www.deloitte.com/us/retail-distribution.

i Deloitte is forecasting a 4 to 4.5 percent increase in 2014 holiday sales compared with 2013. Retail sales between November 2013 and January 2014 (not seasonally adjusted and excluding automotive and gasoline) totaled $944 billion according to the U.S. Commerce Department.
ii Deloitte is forecasting a 13.5 to 14 percent increase in 2014 holiday sales compared with 2013 for the electronic shopping and mail-order category (NAICS 4541) of non-store sales as defined by the U.S. Commerce Department.
iii Digitally-influenced store sales are estimated based on Deloitte’s digital influence factor (The New Digital Divide, April, 2014) applied to forecasted retail (store) sales for November 2014 through January 2015, based on U.S. Commerce Department retail sales data. Deloitte’s analysis of digitally-influenced sales exclude motor vehicle and parts dealers, non-store retailers (which include electronic shopping and mail-order houses) and food services and drinking places.

As used in this document, “Deloitte” means Deloitte Tax LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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