Shipping delays and increasing sales will be the trend for the upcoming holiday season, according to several firms. Consumer YoY spending is expected to grow, as retail sales can record a 7% surge from the same period last year.
According to holiday forecasts by analysts from Bain Capital Specialty Finance Inc (NYSE:BCSF), November and December sales are expected to jump 7% to $800 billion in products such as clothes, jewelry, and electronics.
Similarly, Deloitte predicts a 7% to 9% surge, above the 5.8% reported in the same period in 2020.
Mastercard SpendingPulse is betting on a 7.4% growth, with an 11.1% jump from two years ago. As reported by CNBC, the firm pins the rebound on to growing consumer appetite and an increase in in-store purchases.
Based on these predictions, U.S. retailers are making there moves to capitalize on the consumer comeback.
Walmart Inc (NYSE:WMT) announced the recruitment of 20,000 supply chain employees, “such as freight handlers and lift drivers, to keep up with demand during the busy shopping season and beyond.”
At a virtual conference hosted by Goldman Sachs Group Inc (NYSE:GS), CEO Doug McMillon said that families —perhaps more than ever— where very much looking forward to the holiday season.
“They want to have a Thanksgiving, and if this situation with the virus enables it —or maybe even if it doesn’t— we’re going to see strong demand through the rest of the year,” he pointed.
Supply Chain Issues
Despite the positive sales outlook for the season, customers are being encouraged to shop soon enough as shipping delays, limited inventory, and fewer discounts might be a constant. This is due to the shortage of workers and supply chain constraints.
World trade this year has been marred by factory closures, logistics bottlenecks, and chip scarcity, all expected to affect this year’s holiday season and spread “well into next year.”
“Many phases of the manufacturing and delivery processes are taking longer than normal. Consumers can expect packages to take more time to get to their doorsteps,” CNBC informs.
According to Salesforce.com, inc. (NYSE:CRM), retailers in the U.S. are up against some extra costs of goods rounding $223 billion.
Insufficient staff in the retail sector is doing nothing but slowing down product deliveries to stores, prompting companies to limit out of stocks and speed delivery times, according to Aaron Cheris, head of Bain’s Americas retail practice.