A consulting firm, Deloitte, released a projection showing how much will be the growth of retail sales this coming holiday season. Based on it, it shows that it will be different compared to the previous years where all people spend for the holidays. The change will depend on how much people with high-income splurged and how much people with low-income tighten their belts this year.
Some economists even mentioned a split growth or K-shaped growth in the economy. It is where a particular group of industries have better sales growth, while others have less. It is different from the previous years, wherein sales are usually spread throughout different sectors. It also explicitly shows the difference in product choices between people who have other incomes.
With the epidemic happening all over the world, there would be setbacks for both producers and consumers. Some industries were able to go by since they can have their employees work at home. However, others can’t do the same since most get their sales from people walking in.
Deloitte stated that the retail sales would go up to $1.152 trillion for this year’s holiday season, which is 1.5% of growth. This retail sales growth is different from the last year’s retail growth of 4.1%, which is $1.14 trillion.
This forecast of Deloitte is derived based on two scenarios; first is when people with low incomes are too afraid to spend their money. They will likely be concerned with their finances, which is why they will buy their necessities. It is more likely to happen based on what is scenarios right now during the epidemic.
The second one is an increase of 3.5% when high-income consumers decided to come out and spend. Still, its unlikely to happen unless there would be factors to push them like stimulus from the government or an effective vaccine for the epidemic.
Deloitte is also expecting an increase in e-commerce sales, which will go up to 35% because of the quarantine restrictions. People would likely avoid public places and would do their spending online. However, this will also be a problem since retailers will have a surge of orders that they might not be able to accommodate.
With this problem, many industries already predicted that holiday shopping would happen early this year. Some shops and stores even decided not to open in thanksgiving, which is different from previous holidays. Others are even trying different strategies on how they can make sure that social distancing is followed.