The holiday shopping season is here, and the U.S. consumer looks healthy, according to former Saks CEO Steve Sadove.
“We’re seeing a good forecast for the holiday season,” Sadove told Yahoo Finance’s YFi PM. “Consumer confidence is high, unemployment is low, the economy is holding up nicely, the stock market is at a record level, that is all good. But remember, the consumer is two-thirds of the U.S. economy, and as the consumer goes, so goes the basic economy, but I’m feeling pretty good about where the economy is now.”
Mastercard SpendingPulse analyzes consumer spending across all payment types including check and credit card. It found that U.S. retail sales during the holiday season between November 1 to December 24 are expected to grow 3.1% this year, compared to the same period last year.
“There’s six fewer shopping days this year than last year,” Sadove noted. “It’s going to put a lot more emphasis on each of those days being important, so every weekend is going to be critical along the way.”
There will be winners and losers in the retail industry, according to Sadove. “I think the internet mobile has totally transformed retail. It’s not that everything is being bought on mobile, but mobile is probably affecting 80% of purchasing decisions,” he explained. “But it’s not just the internet, it’s having the infrastructure and the capabilities to be able to play across channels, those are the winners.”
Discussions around retail often stir up conversations about the ongoing U.S.-China trade war and the U.S. tariffs on Chinese goods. Sadove explained that there are two aspects to the tariff issue. The first part includes the tariffs on capital goods, which already took place. However, when it comes to consumer goods, such as electronic and apparel items, there are still some tariffs looming.
“If [tariffs] were in fact to stay in place, you’d probably see more of the impact of that later as you go into next year, less of it hitting right now, but what you are seeing is shifting in supply chains,” Sadove said. “So because of the uncertainty, a lot of manufacturers are looking at alternative sourcing scenarios. So that’s going to have a longer-term impact beyond whether or not the tariffs stay on or not.”
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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