Holiday shopping season is here! U.S. retailers are starting to recover!

It is learned that according to a report by market research firm Insider Intelligence, the 2022 US holiday season will still be very strong with the recovery of the consumer confidence index, the arrival of the back-to-school season, and the decline in the inflation rate.

Several indicators suggest that the holiday season is expected to usher in a sales boom

The consumer confidence index rebounded. According to the University of Michigan's Consumer Confidence Index, the US consumer confidence index was 58.2 in August, higher than 51.5 in July and also higher than the 55.1 at the beginning of this month.

Consumer spending is increasing. According to the U.S. Commerce Department, U.S. consumer spending increased 0.2% in July compared with June.

Inflation is slowing. According to the Federal Reserve's preferred indicator, the U.S. consumer price index fell 0.1% in July compared with June, driven by a sharp drop in fuel prices, the first decline in the U.S. since the pandemic began.

Many retailers are optimistic about revenue in the second half of the year

The above indicators indicate that sales during this year's holiday season will remain very strong, so some retailers are also very optimistic about their revenue in the second half of the year.

Furniture retailer Arhaus expects full-year revenue to increase to $1.173 billion to $1.193 billion, with full-year net income expected to reach $92 million to $98 million, based on a strong first half.

Sporting goods retailers Hibbett and Dick's Sporting Goods also raised their full-year earnings forecasts due to strong back-to-school sales.

Separately, luxury watch company Movado expects record revenue.

However, sales growth is not inevitable.

Last Friday, U.S. Federal Reserve Chairman Powell said at the Jackson Hole Global Central Bank Annual Meeting that the Fed will continue to raise interest rates and maintain higher interest rates for some time, while acknowledging that fighting inflation will bring pain to households and businesses.

The Fed's continued interest rate hikes may stifle the growth momentum of the U.S. economy. "While higher interest rates, slower growth, and softer labor market conditions will bring inflation down, this will also bring pain to some American families and businesses, and this is the price of lower inflation," Powell added.

It is understood that until inflation rates fall significantly, retailers such as Kohl's and Macy's will feel the impact of low- and middle-income customers reducing their discretionary spending. On the other hand, if interest rates remain high, already hard-hit retailers such as Peloton and The RealReal will not be able to achieve profitability.

Editor ✎ Nicole/

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