Retail’s biggest season is almost here, but retailers may not be feeling the cheer yet. In September, total nominal US retail sales for Bain-defined categories grew just 2.3% year over year, continuing the downward trend that began in July and falling short of last September’s 2.8% growth. Both in-store and nonstore sales lost momentum. The slowdown supports our forecast of a more sluggish holiday season.
Bain’s Consumer Health Index shows a more cautious consumer mindset this year, with a reduced outlook and lower intent to spend compared to last year. The largest decrease in intent to spend is among upper-income households, which make up more than half of US spending. Rising credit card delinquencies, low savings, and elevated nondiscretionary costs are squeezing many Americans. Nearly half now expect groceries to be their top spending category this season. And many say their top priority is enjoying time with loved ones, as they focus on essentials and plan to reduce spending.
Still, we expect November and December to remain the biggest sales months of the year. Most consumers say they will continue to wait until at least November to start their holiday shopping.
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