National holiday retail sales are expected to jump again this year, eclipsing $700 billion for the first time ever. Both brick-and-mortar and eCommerce are projected to rise – two trends that will likely translate to the state level.
According to the National Retail Federation (NRF), holiday retail sales in November and December are projected to increase by as much as 4.8 percent, bringing the total US sales to roughly $720 billion. Although this is slightly slower than last year’s growth rate, it is a much higher figure than the past five-year average, which is 3.9 percent.
Arizona Retailers Association Executive Director Michelle Ahlmer explains that Arizona will almost certainly experience similar trends. “We always calculate our own growth rates and we expect the national increase to translate to the growth of Arizona,” Ahlmer notes. “Back in the heyday, we were anticipating a 7 percent increase, but we haven’t seen those numbers in years. We’re excited about a 4 to 5 percent increase.”
Furthermore, Adobe Analytics reports that national online sales are likely to grow by almost 15 percent and account for $124 billion in sales – more than 17 percent of total revenue. Many customers are turning to Amazon for their purchases. Amazon representative Ali Griffiths notes, “We’re bringing more innovative ways to shop than ever before – from mobile to Alexa Shopping, in-store shopping experiences, Treasure Truck, and more.” These provide new opportunities for shoppers who hope to escape stress from crowds.
However, Ahlmer says that this may not be the case in Arizona, which is beneficial for the state’s economy.
“The most interesting study I’ve seen is that millennials are getting more interested in going to brick-and-mortar stores,” Ahlmer said. “Usually, they do a lot of online shopping, but that’s not the case this year. When you talk about sales tax revenue, this is a really good thing. Plus, people tend to be more spendy when they buy in-person rather than online because they impulse buy.”
Ahlmer highlights discount stores as some of the most popular during the holidays. Because stores like Target and Walmart have groceries in addition to potential gifts, many shoppers go there for convenience and time efficiency. Moreover, an NRF study found that 75 percent of consumers reported that sales are “very” or “extremely” important to them. On the opposite end of the spectrum, Ahlmer notes that luxury items are also expected to see a favorable boost this holiday season.
The increase in spending across the board can largely be attributed to consumer confidence. Both nationally and locally, wages are up, unemployment is down considerably, and federal tax reform has brought additional relief. Citizens have positive feelings about the economic picture, and consequently, they’re willing to spend more this holiday season.