Bankinter | The National Retail Federation forecasts that sales during the holiday season (1 November to 31 December) will grow by 3.7 to 4.2% compared to 4.3% in 2024. They will reach between $1,010 and $1,020 billion. ‘Consumers are cautious, but remain fundamentally strong and will continue to drive economic growth.’ The NRF remains optimistic about the Christmas season and expects consumers to continue looking for savings on non-essential products, especially hospitality and travel, in order to spend on gifts. Staff recruitment will amount to between 265,000 and 365,000 compared to 442,000 in 2024. One risk is the closure of the US government at this time of year. The delay in public spending could affect household incomes, penalising consumption.
Bankinter analysis team’s view: The growth rate is moderating compared to the previous five years (4.3% in 2024, 3.9% in 2023; 4.7% in 2022; 12.5% in 2021; 8.9% in 2020), but it is higher than the average of 3.6% in the pre-pandemic period 2010/2019. Household consumption, especially of discretionary products, is slowing down in an environment of lower savings rates and still high inflation, but is showing resilience supported by the strength of the labour market and the wealth effect following rises in financial assets. Although lower income segments are suffering from high prices due to the impact of tariffs, the ~10% of high-income earners account for ~50% of American consumption. Forecasts from major retail groups and other sources are mixed. PwC forecasts a 5.3% drop in per capita spending in an environment of greater uncertainty than in other years; Deloitte forecasts a total increase in sales of between 2.9% and 3.4%, the lowest level since 2018; Salesforce estimates online sales growth of 2.1% compared to 4.0% in 2024. Tapestry, Under Armour and Canada Goose have also been cautious in an environment of high inflation and uncertainty. We remain cautious on the sector, favouring selective luxury stocks (LVMH, Kering, EssilorLuxottica, Richemont), retail chains with strong positioning and barriers to entry (Walmart) and online platforms with other technological advantages (Amazon).
