The Goose Is Getting Fat: Holiday Sales Outlook

Wells Fargo Research Team Wells Fargo

Executive Summary

Coming off the best holiday season in more than a decade last year, retailers are poised for another good year, at least in terms of the most important measure—sales. Overall, we expect holiday sales to increase about 4.5% this season.

This will be a record-tying 10th consecutive holiday season without a recession. But, a booming economy brings its own challenges. Both traditional stores and online merchants face a patchwork of pricing challenges amid tight supply chains. Further pressuring prices is the tightest labor market in a generation that not only makes it tricky and more costly to find seasonal workers, it also makes services cost more. Thinking of a present for someone who likes "experiences" more than "things"? That will cost you this year.

This special report takes a sneak peek inside the packages, boxes and bags to help you frame your thinking for the holiday shopping season, and how the labor market backdrop and price environment provide unique challenges at this late stage of the cycle.

A Dashing

Start Less than a month from the holiday shopping season, the backdrop for consumer spending is already strong; arguably, it is as good as it has been at any point in the current economic cycle. We already have data for the first nine months on the books for 2018. If we compare sales for the first nine months of this year to the same period in 2017, retail sales broadly are up 5.4%. Our measure of holiday sales–which excludes motor vehicles, gasoline and receipts at bars and restaurants–is up a little less than that at 4.8%.

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Wells Fargo Research Team

Wells Fargo

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