Uncertainty about the economy and minimal job growth will not deter people from doing more holiday shopping than last year. (Source: MGN/Dick Blume)
(RNN) – Whatever people's opinion on how the presidential election will affect the economy, it will not too drastically alter their plans to spend during the holiday season.
The National Retail Federation released a projection this week that estimates holiday sales will increase by $586.1 billion, up more than 4 percent from last year.
The attitudes of consumers who spend their money more selectively and have increased confidence in the housing market temper a workforce that has seen minimal job growth and a stagnant unemployment rate during the past few years, according to the NRF.
"While moderate compared to what we experienced the last two holiday seasons, the forecast is a very pragmatic look at what to expect this year given the current rate of economic growth," said NRF Chief Economist Jack Kleinhenz, Ph.D. "There's still some general anxiety amongst consumers when it comes to how the state of the economy is impacting their spending plans, but retailers can expect to see excitement around their promotions and plenty of bargain hunters both online and in stores in the coming months."
Shop.org added to the positive outlook for the holiday season by forecasting that online holiday sales would grow 12 percent from last year. People could spend as much as $96 billion online during the last two months of the year.
"Online retail has been a bright spot for years and we don't expect that trend to change anytime soon, especially with the growth in mobile," stated NRF President and CEO Matthew Shay. "Aside from the convenience, shoppers look to the holiday season to take advantage of retailers' increased digital offerings. In addition to enhancing the site experience, retailers have spent the year investing in optimizing their mobile and social platforms, just what holiday shoppers are looking for."
The NRF and Shop.org define holiday sales as retail industry purchases in the months of November and December. NRF excludes sales at automotive dealers, gas stations and restaurants.
GameStop is one of many companies trying to regroup after watching its revenue decrease because of online shopping. However, the company plans to repair and resell Apple products and other smartphones and tablets.
That strategy could generate $1 billion in revenue in just a few years, according to analyst Michael Pachter of Wedbush Securities.
Additionally, the NRF projected retailers would hire between 585,000 to 625,000 workers for the holidays. Companies hired 607,500 workers during last year's holiday season.
Toys "R" Us is at least one company that expects some of its seasonal positions to turn into full-time jobs.
Despite a projection to hire several thousand fewer seasonal employees compared to last year, Target is still expected to add more people than any other company during November and December. Target said the decrease is because 30 percent of its seasonal employees last year moved into permanent positions.
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