Christmas holiday retail sales in the U.S. are expected to climb above the $1 trillion mark for the first time this year, on the back of low unemployment, solid income growth and higher consumer confidence, according to a study released Tuesday.
Total retail sales in the U.S. will hit $1.002 trillion during the holiday period — which it defines as spanning November 1 and December 31 this year — an increase of almost 6 percent from the previous year, marking the “strongest growth since 2011,” data from market research firm eMarketer showed.
The report comes amid concerns over the future of brick-and-mortar retailers, with the likes of Sears and Toys ‘R’ Us facing bankruptcy — although the latter’s lenders recently cancelled a bankruptcy auction and plans to revive the brand.
Not to mention the fact that several retailers are closing hundreds of stores across the country as the threat of increased competition from e-commerce firms like Amazon and eBay continues to put pressure on the industry. On Monday, home improvement chain Lowe’s said it would shutter 51 underperforming stores across the U.S. and Canada.
The research said the sector would see a 4.4 percent gain year-on-year in in-store sales, rising to $878.38 billion, and that brick-and-mortar would be a “bright spot” for the retail industry as a whole for the 2018 Christmas holiday period.
“While e-commerce will continue to see strong double-digit gains, brick-and-mortar retail should be a particular bright spot this holiday season,” Andrew Lipsman, principal analyst at eMarketer, said in a statement Tuesday.
“Not every brick-and-mortar retailer is thriving, and several have shut their doors this year, but others are really capitalizing on the strong consumer economy. Retailers are luring in shoppers with remodeled stores, streamlined checkout and options to buy online, pick up in-store.”
E-commerce continues to grow in market share, however, and will capture 12.3 percent of the total sales figure this year, according to eMarketer. Online retail sales are predicted to rise 16.6 percent from the previous year, to $123.73 billion, the study said.
Cindy Liu, forecasting analyst at eMarketer, said the main “battle” for U.S. retailers would be gaining market share in the e-tail space. “We should expect more promotions and perks like free and fast shipping, as retailers compete against Amazon,” she said in a statement.
Indeed, on Monday, Amazon made an early move to up the pressure on the industry for this year’s holiday season, dropping minimum purchase requirements on all orders, which means all of its customers will qualify for free shipping for a limited period.