South Florida Sun-Sentinel (Sunday)
Holiday shopping expected to grow this year
Although there are only 26 days between Thanksgiving and Christmas this year, a 4.5% to 5.5% increase is estimated from last year’s shopping season.
If that rate holds, it would bring total retail sales that likely would exceed $1.1 trillion this winter, up from $1.09 trillion last year, Deloitte economists say.
Analysts note that while the economy has downshifted to an annual growth rate of about 2% from last year’s 2.9% pace, consumers have remained resilient and have been the main driver of spending this year. With more Americans employed and overall inflation remaining low, consumer confidence remains above its long-term average.
Before you get too excited about the holiday shopping hoopla, let me don my CFP hat and remind you that those who create lists are far more likely not to blow through their coveted emergency reserve funds or pile on debt.
Start the process by going back to last holiday season. Tally up what you spent and who you spent money on for gifts and don’t forget all the tips to your dog walker, doorman and hair stylist. Then create the list for this year and add the cost of entertaining.
As you attach dollar amounts to each line item, remember that research finds that experiential gifts are the most memorable, so consider spending time with someone instead of giving another unused gift card. Consider a special hike, a free museum day or maybe offer to babysit for a friend or family member.
And yes, sticking to the game plan is like trying to eat well during the holidays: a laudable goal, but hard to execute.
Technology may help you keep you on track. Giftster is a free app that can help organize your gift list and is sharable with friends and family. ShopSavvy allows you to scan the bar code of any product and compare all the best prices available. Shopular provides deals, coupons and locationbased notifications, and Honey is a free browser extension that automatically finds and applies coupon codes at checkout for more than 30,000 shopping sites.
It’s hard not to get sucked into the vortex of the holiday shopping frenzy. But avoid impulse buying, which can blow up your plan quickly.
Finally, the season will once again underscore winners and losers. This season, online sales are poised to jump 14% to 18% compared with 2018. In its annual holiday outlook, PricewaterhouseCoopers LLP found that 54% of respondents will opt for shopping via their smartphones, laptops, PCs and in-home voice assistants this season, compared with 50% last year.
Retailers such as Walmart and Target have smartened up and are using marketing, social media and a blend of online ordering with in-store pickup to lure consumers into brick and mortar stores, where they, hopefully, will be tempted to spend even more money.
But it’s a tough sell in certain segments. Macy’s, Kohl’s and J.C. Penney all reported weaker quarterly results ahead of the holiday season. The one-year stock performance gives you an idea of the problems. As of this writing, Macy’s has plunged by more than 50% from a year ago; Kohl’s has dropped nearly 30%; and J.C. Penney is off 17%. During the same time horizon, the S&P Retail ETF (XRT) is down 2.25% and the broader S&P 500 is up more than 17%.