Expect Holiday 2015 Spending to be Deceptively Weak

The holiday will be “deceptively” weak because households continue to spend at a healthy place in many non-retail categories and online. The spending weakness, however, will remain focused in the traditional retail measures that get inordinate attention during the holidays.

Holiday Spending 2015: Expect It to be Deceptively WeakSee below for insights on the impact that the holiday will have @work and @home. And see the document at the following link for more detail on the MacroSavvy™ forecast of a weaker gain of 3.5% this year compared with 4.5% growth last year.

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Impact @Work:Household spending will remain relatively strong at non-retail places led by auto dealers and restaurants—and at a few retail places led by online retailers (+14.5%). In-store retail sales, however, will be weak (+2.0%) by comparison—especially at the big-box stores such as Walmart.

  • A key to good holiday performance—beyond capitalizing on the shift online and to social media—will be pricing and promotion tactics. Used strategically to boost demand, great price deals will help drive good performance. However, overly aggressive and broad promotions will depress performance for store retailers—especially at the lower end of the market and among big-box stores.

Impact @Home: It will be a great time to be a shopper this holiday—even if it’s a “so-so” holiday for retailers. There will be a lot of great buys—especially if you shop at the big-box stores like Walmart and Target.

A good strategy will be to look for the best deals early and late in the holiday shopping season:

  • Expand on your past shopping routines to get the best deals. Keep in mind that Thanksgiving night is becoming just as big an opportunity as Black Friday. And the Cyber Monday after Thanksgiving will likely expand into Cyber Weekend and Cyber Week as online retailers do more to counteract the stepped-up promotions of store retailers.
  • Consider leaving some shopping for late in the season to get some of the best deals in stores. Why? As store retailers face tougher competition from online retailers, they likely will get more aggressive with price cuts as the holiday progresses.