Holiday Sales Expected To Grow Significantly This Season

The holiday appetite of the American shopper continues to grow, providing welcome news to both the retail and logistics industries.

U.S. holiday retail sales are expected to grow by 5% to 5.6% compared to last year, according to a report by Deloitte, possibly reaching as high as $1.1 trillion. E-commerce sales specifically are expected to grow by 17% to 22% this year to $134B.

Deloitte's projections are based on strong national wage growth and job security, resulting in more disposable income and increased consumer confidence, Deloitte said in a press release. The firm's forecast is welcome news for retailers, many of which are already taking action in preparation for the holiday rush. Target has increased the number of seasonal employees it plans to hire by 20% this year, MarketWatch reports. The red-and-white retailer has been opening a number of smaller, urban-format stores in cities across the country this year. 

Industrial real estate continues to boom as e-commerce sales grow at a faster rate than overall retail sales, resulting in a continued frenzy for distribution centers that has driven construction at a fevered pace.

Unsurprisingly, Amazon is at the forefront of the e-commerce-driven building boom. It is reportedly working on several multistory distribution centers containing over 2.5M SF each. Industrial landlords are counting on the sheer number of retailers who have been or will be forced to beef up their supply chain to keep up with Amazon, based on the pace of new speculative construction.

More holiday sales will inevitably mean more returns, which is having a bigger impact on distribution centers than ever before. Items bought online often need to be returned online, which increases the need for more space and labor for distribution center operators.