U.S. retail sales figures will climb about four percent this holiday season, buoyed by a better job market, according to a forecast by Deloitte. Still, the news isn’t all good for big retail chains.
Consumers increasingly are buying gifts at niche retailers, potentially pulling spending away from places such as Wal-Mart Stores and Macy’s, Deloitte said in an annual report released on Wednesday. Upstart companies — think Bonobos or Fabletics — collectively have steered $200 billion in annual sales away from big chains over the past five years, the consulting firm estimates.
“You’ve got a lot of small start-ups that are nibbling away a little bit of the volume at a time,” said Rod Sides, vice chairman of Deloitte. “Everyone’s worried about the Amazon effect and those kinds of players. But at the end of the day, it’s the smaller websites that focus on a specific product category and whittle away at market share.”
The shift means traditional retailers will have to work harder over the holidays to entice customers. Even so, gains in wages and disposable income will help put more money in shoppers’ wallets.”
Excluding motor and gasoline purchases, sales may exceed $1 trillion in the November-through-January season, New York-based Deloitte said.
Holiday sales by that measure rose 3.6 percent last year, according to the firm. Online purchases will grow much faster than the overall figure, jumping as much as 19 percent to $98 billion during the 2016 holiday.
U.S. shoppers may be feeling more cheery as economic growth improves and the unemployment rate remains low. An increase in average hourly earnings also may boost consumers’ willingness to spend this holiday.
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“People are still saving more, but just not as much as they were in the past,” Sides said. “They feel more confident about their employment and their wages.”
It’s also gotten easier to start a retailer, especially an e-commerce shop, Sides said.