Holiday shopping season in full swing: 10% increase in sales predicted

Though Black Friday and Cyber Monday aren’t what they used to be, the Retailers Association of Massachusetts is projecting a 10% increase in local sales this holiday season.

While the predicted increase is higher than the roughly 4% boost in holiday season sales seen annually across the Bay State before the COVID-19 pandemic, retailers and consumers face a new challenge this year with “stifling” inflation, said Jon Hurst, president of RAM, which represents 4,000 Massachusetts businesses, large and small.

“They feel like there’s a good opportunity here as consumers come back out and into the stores and are looking to buy these gift items,” Hurst said Tuesday. “Keep in mind, with inflation being at 8%, there is a tight margin for error and profitability.”

To date, Massachusetts businesses report an average sales increase of 6% so far this year compared to all of 2021, RAM data show. Last holiday season saw a sales increase of 16% due to “pent up demand from COVID-related slower sales” earlier in 2021, according to the association.

There’s added importance this holiday season for retailers to set “reasonable” discounts that will help offset the increased costs of “everything,” but still keep shoppers turning out to their stores, especially in-person, Hurst said. Holiday sales represent 20% of annual retail stores, while some stores take in 25-30% of their sales during the period, data show.

A lot of sales have already started before the Black Friday kick-off to the holiday shopping season, with many stores beginning promotions and discounts, Hurst said. The COVID-19 pandemic also has expanded online shopping, and Amazon announced earlier this week that its Cyber Monday event will last Saturday through Monday.

Online sales have risen to make up 25% of all sales during the holiday season, but Hurst said he believes that percentage will flatten now since COVID-19 isn’t as large of a factor as it was the past two years, with more shoppers flocking to stores. Brick-and-mortar shopping creates an experience that often leads to impulse buys, which make up roughly a third of all shopping, he said.

“Black Friday still is big, but it doesn’t start at midnight anymore,” Hurst said. “It’s a little more laid back where folks will show up, the motivated shoppers looking for that one particular item on a loved one’s list. They may show up at 6 a.m. instead of 12:01 a.m.”

In-person shopping on Small Business Saturday is especially important for the survival of local businesses, Hurst said.

About 60% of RAM’S member businesses report they have an online presence, an increase from the 26% during the 2019 holiday season, data show. Despite the uptick in the online shopping environment, it generates just 5% of total holiday sales for small businesses.

Hurt said he encourages shoppers this holiday season to recognize that they make up 70% of the economy.

“We hope the consumer will plan on investing a good percentage of their dollars locally to help our main streets survive and thrive and give them a shot in 2023,” he said. “These small businesses are still stressed from COVID. They’ve gone from one problem to another.”