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November and December, these two months are considered the shopping season, when people across the world shop for Christmas. Along with Christmas, Black Friday is another occasion for shopping. Since Black Friday and Christmas, People shop the most for various consumer goods such as electronics items, smartphones, clothes, fashion accessories, luxury items, etc. But during this year, due to inflation, the holiday season is expected to take a major toll as people are spending more on necessities rather than on luxury or unnecessary items. The growing economic crisis and strengthening of the US Dollar have also resulted in price hikes for almost all products, which is expected to make people spend even less money.
Many analysts and industry experts believe that the holiday season is expected to affect retailers as this year, it will be tough to make the consumers purchase their goods. This time, the damage to the retailers is expected to be even greater as due to the surge saw during last year, many retailers have overstocked for this holiday season. The Bureau of Labor Statistics, the US agency which governs the statistical data, said that the inflation in the country has increased by 8.2% from last year. This inflation value is the highest in the last four decades. This year, the National Retail Federation has stated that during the holiday season, holiday sales are expected to grow by almost 6 to 7% over last year’s sales. Although this seems promising, it is significantly lower than the holiday sales values of the previous two years. During 2020, when the world was facing the pandemic, holiday sales rose by 8.2% over the value of 2019. During 2021, holiday sales grew exponentially by around 13.5% in comparison to 2021.
Many factors are expected to contribute to this decline in holiday sales. Last year, the major driver for bringing people to the stores or onto e-commerce sites was the urge of securing big discounts and complementary gifts. At that time, the economy was pretty much stable, which is why people were spending more on luxury items. But due to the war between Russia and Ukraine, the economy in European countries took a massive hit, which also affected the US market, resulting in inflation. Many people are struggling to get their basic needs completed during times of inflation. Hence, it is almost impossible for these people to spend on items that they do not need, no matter if it's the holiday season. On the other hand, seeing the surge in last year, many retailers such as Walmart, have overstocked their shelves, to match the demand that they experienced in the previous year.
However, there is still a ray of hope for retailers across the country, as people are still willing to spend during the season of Christmas. According to Matt Shay, Chief Executive at NRF, people in the US are willing to spend their money during the holiday season, as this season provides some of the best deals along with complimentary gifts. But he added that these people are being cautious about how to spend their money. People are more willing to use their credit cards and saving accounts to spend during the holiday season than in any other way.
Yash Ranjan11/04/2022
