Holiday shopping outside Saks Fifth Avenue, NYC.

Holiday retail sales should see a 3.3 to 4 percent increase versus a year ago, according to a new study from AlixPartners.

This story first appeared in the September 23, 2016 issue of WWD. Subscribe Today.

The results include such categories as apparel and footwear, furniture, electronics and appliances, food, beverage, health and personal care, and sporting goods, but excludes motor vehicles, fuel, restaurants and drinking establishments.

The firm found that recent presidential years appear to most adversely impact retail sales in September and October, with a bounceback in November and December.

In a survey of 1,008 U.S. consumers from Sept. 8-12 about their holiday shopping plans, AlixPartners revealed that 83 percent (and 87 percent of Millennials) expect to spend about the same or more this holiday season versus a year ago. Thirty two percent plan to start holiday shopping earlier this year, 18 percent have already started, and 38 percent will have started before Halloween. The company said that only eight percent don’t plan to use online sources to research their purchases, and only six percent don’t plan to make online purchases.

Noam Paransky, a director in the firm’s retail practice said, “In the past, AlixPartners’ methodology has been among the most accurate out there in forecasting holiday sales, including hitting last year’s 2.82 percent increase also right on the nose. This year, we’re anticipating sales that continue to be a bit better than the year before, but still not up to historical, pre-recession standards that much of the industry became used to.”

AlixPartners found that August was only the third time (with the exception of 2008 financial crisis), that sales declined versus July since 1992 (the first year of published data on the U.S. Commerce Department web site). In both prior instances (1993 and 2013), sales growth in the September-December period was better than the January-August period.

Paransky told WWD, “Our method is rooted in a historical analytic framework that goes back five or six years,” he said. He added that 90 percent of full-year sales are very similar and there’s very little deviation. “We extrapolate the full year from that,” he said. When coming up with the retail sales prediction, the best indication is the consumers’ previous year’s activity, rather than what they say they’ll spend for the holiday season, he said.

In the 2012 and 2004 presidential election years, year-over-year sales growth slowed an average of -22 percent in September-October, but bounced back an average of +16 percent in November-December, said AlixPartners. Paransky said that often the political messaging overwhelms the consumer and retailers don’t get good placement. “Once the election is decided there’s a bit of a bounce back effect,” he said.

The company found that 38 percent of consumers said they’re better off than a year ago, and of that group, 52 percent of Millennials said they were “better” or “much better” off.

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