Holiday Season Sales Projected to Rise 4%, E-Commerce Sales Up by Double Digits

By Paul Ausick Updated Apr 27, 10:58PM EDT · Published Sep 17, 8:30AM EDT

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Holiday Season Sales Projected to Rise 4%, E-Commerce Sales Up by Double Digits — © Halfpoint / Shutterstock.com

The holiday shopping season of 2017 posted a 5.5% jump compared to the prior year total. That’s a tough comparison to beat, but Coresight Research is forecasting a gain of 4% year over year for 2018. Holiday spending is forecast to increase from $692 billion last year to $720 billion.

For the first seven months of 2018, retail sales are up a cumulative 4.5%. Coresight’s slightly lower projection for the two-month holiday shopping season is due to “demanding comparatives from holiday 2017 when November and December sales were up 5.5% in total with November sales up by a very strong 6.7%,” according to Census Bureau data.

Average year-over-year growth for the past 10 years has been 2.8%, based on data from the National Retail Federation. That 10-year period also includes the global financial crisis period when sales fell sharply and took a long time to recover.

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Coresight offered the following forecast for e-commerce spending:

Total online retail sales excluding automobiles will rise by around 16% year over year over the holiday period.

E-commerce will capture almost 16% of all retail sales excluding automobiles and gasoline. This is up from 14.0% in the fourth quarter of 2017.

E-commerce will capture fully 20% of all nonfood retail sales, up from around 18.5% for the final quarter of 2017.

For all of 2018, Coresight estimates e-commerce will account for more than one-third of all consumer electronics sales and more than one-fifth of all apparel sales, with those percentages rising during the holiday shopping season.

According to a July survey from Prosper Insights & Analytics cited by Coresight, the percentage of U.S. consumers who plan to increase their holiday spending this year totals 2.5%, compared with 0.7% who say they will spend less than last year. Coresight notes:

These findings further bolster our expectation that the holiday season will be robust even though it may be more mixed than current trajectories imply. Shoppers stand ready to open their wallets this holiday but we think that retailers should not expect a spectacular end to the year.

The 2018 holiday shopping season also gets a boost from the calendar. There is one additional shopping day between Thanksgiving and Christmas day this year, and Chanukah falls a week earlier as well.

The weather is also expected to cooperate, with warmer temperatures over more of the country, especially east of the Mississippi River.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.