Consumers Expected to Curb Spending This Holiday Season
Even though inflation is cooling off, the cost of living remains high here and consumers are expected to curb spending this holiday season, the Retailers Association of Massachusetts said Wednesday.
The statewide trade association predicts there will be a 1.7% increase in local holiday shopping sales. The prediction, based on an annual survey of Massachusetts small businesses, compares to the 3.7% to 4.2% predicted by the National Retail Federation, which accounts for businesses of all types and sizes.
Holiday sales for the 2024 season increased 4% in Massachusetts and nationally. Sales in the 2023 season
increased 3.8% here and 5.3% nationally, and sales rose 1.2% in Massachusetts in 2022 and 7% nationally.
“We are asking Massachusetts’ holiday shoppers to remember that how they invest their dollars makes a big difference for the local economy,” RAM President Jon Hurst said. “We know consumers today are cautious, and they are spending increased portions of their holiday spending budget online, but we ask them to commit to investing a good portion of their purchases right here in our communities.”
Year-to-date sales for RAM members are up 2%, but cost-of-living strains on families and sellers are raising profitability concerns for small businesses that are seeing costs rise faster than sales. RAM members said payroll costs were up 2.6% this year and fourth quarter inventories rose 2.4% over the same period last year.
About 60% of the association’s members sell online, compared with 26% during the 2019 holiday season, Hurst said. Internet sales now make up 5 to 15% of the smaller RAM members’ holiday sales. Nationally, online sales are expected to reach 40% of holiday sales this season.
On average, holiday sales make up 20% of annual retail sales – with some stores getting 25 to 30% of their business during the period. Retail sales in Massachusetts during November and December – excluding restaurants, auto sales and gas – usually reach $25.3 billion. National holiday sales are expected to hit more than $1 trillion this year, compared with the $976.1 billion reported last year, according to the NRF.
