Global consultancy Bain & Company expects US retail sales to slow down this holiday season and record the lowest growth rate since 2018.

Inflation-adjusted seasonal sales will grow at a modest 1 per cent, well below the 10-year average, according to Bain’s 2023 Holiday Shopping Outlook.

This will follow a relatively sluggish growth rate in 2023, having increased only 4 per cent year over year on a nominal basis.

While growth was largely driven by e-commerce, most in-store categories have decelerated over the past few months, with some declining.

The situation may not improve in the coming holiday season in November and December as shoppers continue to allocate more to costly non-discretionary spending, according to Bain’s analysis.

“Retailers are facing new challenges this year and are overcoming headwinds from higher interest rates amid increasing debt,” said Aaron Cheris, head of Bain & Company’s Americas retail practice.

However, holiday sales may receive a boost as prices remain elevated compared to last year, Cheris continued.

“Savvy retailers will start early and lead with value messaging – both in terms of price and quality – employing positive commonalities to appeal to potentially cautious consumers this holiday season,” said Sarah Irizarry, associate partner in Bain & Company’s retail practice.