Holiday retail sales could rise 5% despite "unprecedented uncertainty"

Retailers could experience a dramatic rise in sales during the holiday season, despite obstacles such as the US-China trade war and the threat of further economic slowdown.

According to an annual survey conducted by Deloitte, holiday retail sales for 2019 are expected to increase by 4.5% to 5%, to exceed $ 1.1 trillion. That would be better than the Census Bureau data on sales growth of 3.1% on sales of $ 1.09 trillion from November to January.

"I think it will be a surprise for our customers," said Rod Sides, vice president of Deloitte's retail and distribution group in the United States. " [retailers] expect a slightly lower increase. … It's probably bigger than those expectations. "

The international consultancy firm AlixPartners separately forecasts a growth in holiday sales of 4.4% to 5.3%.

But AlixPartners says that there remains an "unprecedented uncertainty" as the season approaches.

"Our forecasts are optimistic, but we nevertheless advise our customers to be agile," said Joel Bines, general manager of AlixPartners. "These are unexplored waters, and the best way to go is one that includes strict cost control and flawless execution."

According to Sides, Deloitte anticipates some growth factors of up to 5% growth. The first is that the 2019 holiday season ends last year during which the US government closed its doors and the stock market saw a sharp decline last December. "Were [coming] on a much lower base. … but we do not expect [those things] happen this holiday season, "he said.

The US labor market remains strong, with unemployment rates near record lows and high consumer confidence, Deloitte said in his report.

According to Deloitte forecasts, digital retail sales are also expected to be robust over the holiday season, at between $ 144 billion and $ 149 billion. Online sales are expected to increase 14% to 18%, which would be better than a growth of 11.2% in 2018.

"In holidays, convenience is a very important factor," said Sides. "I think we're going to witness a crisis of convenience," he said, with more buyers buying online at the last minute and picking up those items in-store or taking advantage of options delivery the same day or the same day.

Looking forward to a good holiday season, Target and Walmart have revised upward their earnings outlook for the year.

Clothing retailers based in shopping malls such as Gap and Victoria's owner L's Secret are those who are struggling to attract shoppers to stores without having to resort to strong discounts and flash sales that weigh on profits.

The S & P 500 Retail ETF (XRT) is down about 15% from the previous year.