ANDERSON — A robust economy coupled with consumers with more disposable income should make for a lucrative holiday season for retailers, one local economist says.
With Americans expected to have capped the five-day Thanksgiving weekend by shattering spending records on Cyber Monday — as much as $9.4 billion, according to Adobe Analytics — experts anticipate a bonanza reflecting an economy that continues to defy expectations with its sustained growth.
“The consistent growth in holiday retail sales is a reflection of both the long-term growth in the U.S. economy and its relatively strong performance over the last few years,” says Steve Horwitz, an economics professor at Ball State University.
Overall holiday spending this year is expected to increase by 3.8% to 4.2% over 2018, according to projections from the National Retail Federation. Despite the fact that Thanksgiving fell on the latest possible date this year — leaving only 26 shopping days between that holiday and Christmas — the NRF expects consumers to spend a record $730 billion, which would top last year’s figure of $701 billion.
Horwitz said the retail environment isn’t necessarily producing steep holiday discounts due to excessive inventory, which makes the outsized spending expectations all the more remarkable.
“Given how healthy the economy has been, it would be surprising to find that retailers have inventory they’re sitting on,” Horwitz said. “There’s just some extraordinary competitiveness that we have now. If you think about the competition among brick-and-mortar retailers along with the ability to find where the goods are cheapest right now being so easy, I don’t think firms are motivated to keep prices high.”
Horwitz noted that, although many retailers still kept long hours on Black Friday, advertising for sales on that particular day seemed to decrease.
“It just seems to be that the advertising for Black Friday has been much less, and if it’s true, I would suspect it’s because of Cyber Monday,” he said. “Online shopping in general has sort of moved into the forefront in a way that you can’t ignore.”