Another year is almost behind us and the numbers were surprising. Year-over-year, growth was off the charts for many retailers. For some, not in a good way, but for those essential businesses selling groceries, hardware, and general merchandise, you more than likely exceeded some of your best quarters. Now what? Can we expect more of the same?
Most analysts have identified last quarter as an anomaly, a perfect storm that provided certain retail segments with a significant challenge, but also with a sizable reward. No one’s saying it was easy, but the bottom line looked pretty good. So let’s do it again this quarter. Right? That may be harder than it looks.
The landscape has changed. The pandemic is still with us, but the panic buying has diminished. The supply chain is catching up with demand and the economy is a huge uncertainty going forward.
To help bring some insight into what consumers are thinking right now, we commissioned a survey to find out how people are adjusting to the “new normal”. We believe listening to the voice of the consumer will bring about the best path forward for our clients.
In our survey of over 1,000 random consumers, 78.3% said they were “extremely concerned” or “very concerned” about the economy during the next 3 months.1
Additionally, when asked, “What impact will the wars in Israel and Ukraine, re-instatement of school loans, and our poor economy have on your household spending during the next three months”, 72% of all respondents said they were planning to spend less. That included 79% of households with incomes greater than $150,000.
We are going through yet another transition with the economy and the too-soon-upon us holiday season will add even more stress to already tightened household budgets nationwide. And it doesn’t help that the American unemployment rate is projected to rise during 2024 reflecting a slow economic growth. (www.cbo.gov. >publication #59431:) And 2025 isn’t being projected much better with a +1.7 GDP (the slowest rate since 2009).
According to Supermarket News, Holiday retail sales are predicted to increase between 3.5% to 4.6% in 2023, according to an annual holiday retail forecast from Deloitte. In addition, the professional services company said it expects ecommerce holiday sales to grow between 10.3% to 12.8% compared to last year’s holiday season.
The report forecasts that holiday sales will total $1.54 to $1.56 trillion during the November to January timeframe. In 2022, holiday sales grew by 7.6% in the same period, a total of $1.49 trillion.
Ecommerce sales are projected to increase between $278 billion and $284 billion year-over-year this season.
Daniel Bachman, Deloitte’s U.S. economic forecaster, said that healthy employment and income growth will keep the volume of sales growing for the 2023 holiday season, especially as inflation continues to moderate.
“This means the total value of retail sales will grow more slowly than last year. Our forecast also reflects a decreasing pool of pandemic-era savings, both of which will weigh on retail sales and are reflected in our lower projected growth for the season,” Bachman said.
“Retail sales are expected to increase even as higher prices continue to create a battle for consumer spending … and compared to pre-pandemic levels, spending on durable goods remains high,” said Nick Handrinos, vice chair, Deloitte LLP, and U.S. retail, wholesale and distribution and consumer products leader. “This season e-commerce sales should continue to be strong as consumers search for the best deals online to maximize their wallets. Retailers who remain flexible to shifting consumer demand and behaviors will likely be poised for growth this holiday season.”
Deciding when to resume advertising is like trying to time the stock market. Once you are out, it’s challenging to know when to get back in. It’s critical to recognize that circumstances will never be “perfect” and waiting too long can have significant long-term consequences. More importantly, remaining invisible creates a significant opportunity for competitors to establish new relationships with your customers.
By using print, you keep loyal customers coming in and grow new customers by showing them you are open and ready to serve them safely and with competitive pricing.
Source: Insight Factory/Signature Graphics Consumer Pulse Survey
