Retail Holiday Newsletter
Retailers faced more than a few flurries this holiday season—namely, difficult macroeconomic trends. US consumers were contending with steep interest rates, the remnants of historically high inflation, and a general sense of uneasiness. Yet the industry still delivered moderate sales growth. Total nominal Bain-defined retail sales grew 3.8% year over year this holiday season (November and December), close to our forecast of 3.0% growth but below the 10-year average of 5.1%.
Nonstore sales helped retailers weather the storm, growing 9.2% year over year this season and accounting for nearly 28% of sales—its highest seasonal share to date. Meanwhile, in-store sales grew just 1.9%, the lowest rate since 2019. Within in-store sales, retailers in key gifting categories—such as electronics and health and personal care—enjoyed exceptionally strong nominal sales growth, while furniture stores, building and garden stores, and department stores saw year-over-year declines during the holidays.
In the new year, macroeconomic uncertainty is likely to persist, even as inflation slows. Leading retailers will endure by focusing on long-term value creation for all of their key stakeholders—including investors, customers, employees, suppliers, and communities.