By Joshua Burd
A healthy consumer is fueling measured optimism among brick-and-mortar retailers as they prepare for the holiday shopping season to begin in earnest.
That was among several key takeaways earlier this month as Levin Management Corp. released the findings of its annual Pre-Holiday Retail Sentiment Survey. The poll, which is based on responses from tenants in the firm’s leased and managed shopping center portfolio, found that retailers anticipate solid 2024 holiday sales performance against a backdrop in which consumers are confident even as they navigate higher, inflation-driven pricing.
Merchants are responding by offering more sales and discounts, as they become increasingly innovative in leveraging the benefits of the brick-and-mortar experience.
“Retail is doing well generally, and that bodes well heading into the core holiday season,” said Matthew K. Harding, the firm’s CEO. “While seasonal forecasts are varied, they all anticipate record spending yet on a moderated growth trajectory. Through history, the holiday season has been prioritized by consumers as a time to spend extra on gifts for loved ones — and themselves. It appears this year is shaping up to be no exception.”
Overall, 66.4 percent of LMC survey participants are optimistic about their stores’ performance this holiday season, the firm said, while nearly two-thirds expect their 2024 holiday sales to be the same or higher when compared to 2023. Just 6.3 percent of respondents are pessimistic about the 2024 season, with only 10.5 percent of that group expecting sales to be notably lower than 2023.
To that end, the National Retail Federation projects 2024’s holiday consumer spending will reach a record $902 per person average, when gifts, food, decorations and additional seasonal items are included. The organization forecasts spending growth between 2.5 and 3.5 percent, while PwC and Deloitte offer projections of 7 percent and 2.3 percent to 3.3 percent, respectively.
Among other key findings, consumers may be waiting longer to begin shopping for their holiday gifts, breaking from the trend of the past decade, LMC said. This year, the firm found that 35 percent of respondents anticipate their peak sales will occur during or prior to the Black Friday and Thanksgiving weekend, down from close to 50 percent in 2022 and 2023.
Nearly 21 percent of respondents said they expect their peak sales to occur the weekend before Christmas, marking the highest percentage recorded in the LMC survey since 2012, according to a news release. The poll — now in its 13th year — has tracked a trailing average of just about 15 percent of respondents expecting peak sales to occur that late in the game.
“Although our survey didn’t explore why retailers’ peak period expectations may have changed, the 2024 season does have some distinctive attributes,” Harding said. “This included the presidential election — which could have impacted the earliest spending boom — and a shorter-than-usual shopping period between Thanksgiving and Christmas.”
With inflation on the minds of both shoppers and merchants, nearly 32 percent of respondents say they will have more holiday sales and discounts compared to 2023, LMC said. That marks a 12.6 percent spike from last year and likely a reflection of this year’s more cost-sensitive climate.
Retailers are also focused on enhancing convenience and experience, with nearly 38 percent of survey participants saying they’re trying strategies such as in-store services, loyalty programs, same-day delivery or online purchasing with curbside or in-store pickup, the survey found. In an increasingly omnichannel retail world, 62.5 percent of respondents now offer an online option for purchasing goods, scheduling appointments for services or placing orders for pickup.
“We have seen a distinct shift from the conversations about ecommerce growth cutting into brick-and-mortar success to an acknowledgement that providing a range of channels benefits all, by enabling consumers to shop in whatever combination of in-store and online best meets their needs,” Harding said. “The formula for success this season will be balancing innovation with tradition.”
