U.S. online holiday sales are expected to rise this year at their slowest pace since at least 2015, according to a report, as shoppers feel the brunt of decades-high inflation and soaring interest rates.
Adobe Analytics forecast online sales in November and December to rise 2.5% to $209.7 billion vs. an 8.6% increase a year ago, as more people also return to in-store shopping and bring forward purchases to as early as October.
This is another sign of a gloomy holiday season, with FedEx’s Ground division expecting to lower volume forecasts to reflect customers’ plans to ship fewer holiday packages. Last month, Mastercard’s SpendingPulse report also forecast a slowdown in shopping for the holidays.
With annual inflation running 8.3% in August, Americans have been forced to cut back on discretionary purchases, while the Federal Reserve’s aggressive interest rate hikes are expected to further hit spending power.
Black Friday online sales are expected to grow just by 1% and Thanksgiving sales are anticipated to fall 1%, the Adobe report said.
Adobe’s forecast relies on direct consumer transactions based on over 1 trillion visits to U.S. retail websites.