SandP Global Ratings has said it estimates an 8.5% rise in retail sales this US holiday season from November through December.
The estimated sales growth is well above the 3.5% average of the past 20 years, the global rating agency said in a statement on Tuesday.
“The holiday shopping season is traditionally the most important sales period for the retail sector. This season represents a unique opportunity for retailers to benefit from consumers’ eagerness to bring extra cheer, and gifts, to in-person celebrations,” it said.
US retail sales showed a strong increase in October, before the beginning of the holiday season, according to figures released last week by the Commerce Department, coming in at $638.2 billion, up 1.7% from the revised figure of $627.5 billion in September.
The agency said the strong gain in October was a result of US consumers starting shopping early this year, and absorbing price increases.
During this year’s holiday season, however, a number of issues such as ongoing supply chain bottlenecks, inflation, and labor shortages could dampen retailers’ profit margins, the SandP warned.
Consumer prices rose 6.2% in October, the largest 12-month increase since November 1990, the US Labor Department said.
“We believe inflation has had only a modest effect on consumer spending in, for example, clothing, accessories and food service and drinking places. The flat month-over-month results in apparel and restaurants is likely also a result of supply chain constraints and labor shortages,” it said.
“As inflation filters into nondiscretionary items such as grocery, demand for discretionary categories such as apparel and dining out could soften,” it added.
The agency noted that US consumers are spending above pre-pandemic levels, demonstrating their relative price insensitivity, and it expects this to continue through the holiday shopping season.
Source: Anadolu Agency