When it comes to economic news, the headlines are dominated by international trade—particularly the trade wars between the U.S. and China, with each levying new tariffs, countering the other party’s aggressive move in a game of global chess. Despite the jostling for trade superiority, analysts across the nation are expecting a boost in holiday spending of 4.5-5% across the board, with some optimistically estimating an 18% increase in online purchases.
The estimate isn’t purely a net-gain, but a composite of several factors, including a comparison to 2018 where the stock market took a downturn, and the nation experienced a government shutdown, which further consumer confidence and reduced targets for 2018’s holiday shopping season. A contributor to the bullish predictions is the continuation of near-record low unemployment. This year’s performance is coming off a much lower base than that of 2018, but some retail consultants, while remaining optimistic, are advising clients to stay the course. Consulting firm AlixPartners continues to encourage clients to focus on cost cutting measures and “flawless execution” through the end of the year, despite the positive outlook for year-end sales.
Online Vs. In-Store Sales
Deloitte’s annual retail survey predicts online sales rise 14-18%, well-ahead of last year’s 11.2% rise, as the trend has driven even harder toward convenience. With mega retailers such as Amazon, Walmart, and Target pushing same-day and next-day shipping for pennies, mall-dominant retailers are working to drive new sales through discounts and flash sales, yet such practices weigh on profits heavily.
With sales totals increasing as much as 5% overall and online sales cresting 18%, analysts at Deloitte predict 2019 holiday shopping in the U.S. to top $1.1 trillion, up from $1.09 trillion in 2018. While online sales will be responsible for just shy of $150 billion of total sales, retailers can’t help but notice the growing opportunity with ecommerce. Even at their most conservative figures, Deloitte estimates a boost of 13.1%, toppling 2018, and more than enough for traditionally brick-and-mortar retailers to take notice.
While economic growth has cooled a bit in recent months, the growth continues, and employment remains at near-record highs. As retailers prepare for the holiday surge, cash flow may become strained. ENGS Commercial Capital makes working capital woes a thing of the past, with a variety of products ranging from invoice factoring to supply chain finance to asset-based lending, designed to make cash flow worries a thing of the past. If your business needs greater funding to prepare for the holiday rush, contact us today to learn how we can help Move Your Business Forward!