Holiday sales this year are projected to rise 3.3% for November and December, according to a report from Wells Fargo (WFC, Financials).
The rise is below 4.3%; the long-term average. The bank explained the slower development by greater expenditure distributed across the year and decreased consumer buying power.
According to Wells Fargo's team of economists, led by Senior Economist Tim Quinlan, “Online retailers continue to be the king of the dance when it comes to commanding the most holiday-sale dollars.”
Quinlan noted that consumers’ purchasing power now heavily depends on income growth, as "unique pandemic-era spending sources have faded." The report also highlighted that momentum in retail sales has slowed.
“Through September, the retailers included in our holiday sales metric have seen the slowest year-to-date sales growth in seven years,” Quinlan said. He added that “momentum isn't a huge lift factor this year, as it has been in the years since the pandemic.”
Wells Fargo also noted that stores and online merchants are changing to cater to both early and late consumers. But increased consumer dollar competition has caused many homes to concentrate on value, which may lower spending in conventional retail sectors.
Quinlan underlined that while retail expenditure in 2024 has a softer finish, it is not a big factor influencing the projection in 2025.
