A new report from accounting firm Deloitte says that U.S. holiday sales this year are likely to grow at their slowest pace since 2018 as the American economy weakens.
Deloitte said that U.S. consumers are expected to be frugal with their money this holiday season as persistent inflation and declining savings zap their purchasing power.
The report states that holiday retail sales in America are likely to rise 2.3% to 3.3% in the November 2024 through January 2025 period, totaling up to $1.59 trillion U.S.
That represents a slowdown from 2023, when holiday sales grew 4.3% to $1.54 trillion U.S. and would represent the slowest year-over-year growth in six years.
The year-end Christmas season that includes Black Friday, Cyber Monday and Boxing Day sales events, typically accounts for more than half of U.S. retailers' annual revenue.
Retailers in the U.S. are also being hit with a shorter holiday season this year, with only 27 days between Thanksgiving and Christmas.
As a result, many retailers are launching promotional discounts and holiday sales earlier than ever this autumn.
Deloitte blames the decline in holiday sales growth on cash strapped consumers across all income levels. Signs that the U.S. economy is slowing is also likely to be a factor.
Deloitte added that it expects e-commerce sales to rise 7% to 9% this holiday season and reach $294 billion U.S. That too would be a slowdown from 10% growth to $270 billion U.S. in e-commerce sales last year.