BREAKING NEWS 3 juveniles arrested following multiple online school threats Full Story
STREAMING NOW: Watch Now
CLOSINGS: View Closings

Retailers are gearing up for a huge holiday season

Retailers are gearing up for a huge holiday season

Posted: Sep 16, 2021 9:00 AM
Updated: Sep 16, 2021 9:00 AM

The Delta variant continues to be a concern for retailers. But expectations for a merry holiday season remain intact.

What's happening: US retail sales increased last month as consumers continued to dish out on clothing, furniture and groceries. Sales beat economists' expectations, increasing 0.7% in August from the month prior, the Census Bureau said Thursday.

And new forecasts from Deloitte, Bain & Company and Mastercard predict a huge sales boom in the coming months, the most important time of the year for retailers.

Deloitte estimates that holiday sales will increase between 7% and 9% in 2021 as vaccinations help shoppers feel more comfortable venturing out to spend some of the cash they've been hoarding.

"A steady decline in the savings rate to pre-pandemic levels will support consumer spending and keep retail sales elevated this season," said Daniel Bachman, Deloitte's US economic forecaster. "Further, e-commerce sales will continue to grow as consumers demonstrate an ongoing and steady movement toward buying online across all categories."

The consulting firm expects online sales to jump between 11% and 15% year-over-year, reaching up to $218 billion.

Mastercard, for its part, sees US retail sales rising 7.4%. While online shopping could rally 7.6%, in-store shopping is expected to increase by 6.6% compared to 2020. Bain & Company is also calling for a 7% sales growth rate in November and December.

"The pandemic has impacted nearly every inch of the retail industry," said Aaron Cheris, the head of Bain & Company's Americas Retail practice. "However, heading into this holiday season, we also see important tailwinds for nominal retail growth, including boosts from inflation, rebounding employment, healthy savings rates and wage growth."

But wait: Supply chains remain badly tangled, causing shipping costs to soar. Some companies worry that empty shelves and shortages of in-demand products could dampen the mood.

"The demand is going to be there," MGA Entertainment CEO Isaac Larian told CNN Business late last month. "What is not going to be there is the product to fill the demand."

Mastercard thinks retailers will try to get around supply chain concerns, as well as persistent difficulties in hiring workers, by offering earlier holiday promotions in stores and online — particularly for electronics and clothing items.

"This holiday season will be defined by early shopping," Steve Sadove, senior advisor for Mastercard, said in a statement.

Investor insight: A spending surge would be good news for retail stocks, which shot up earlier this year but have been caught in a holding pattern in recent months. The SPDR S&P Retail ETF is up 45% year-to-date, but has shed 4.4% in the third quarter.

Cigarette giant Philip Morris takes control of inhaler maker

One of the world's largest tobacco companies is getting into the medical device business, despite concerns from health care charities.

The latest: Philip Morris International, which produces Marlboro and Parliament cigarettes, said Thursday that it had taken control of UK inhaler maker Vectura, securing nearly 75% of the firm's shares.

More than 45% of Vectura shareholders accepted the takeover offer, and Philip Morris international purchased 29% of the company's shares on the open market, my CNN Business colleague Charles Riley reports.

"We have reached an important milestone in our acquisition of Vectura," Philip Morris CEO Jacek Olczak said in a statement. "We are very excited about the critical role Vectura will play in our Beyond Nicotine strategy."

Step back: The takeover boosts the tobacco company's efforts to generate more than half of its net revenue from smoke-free products such as e-cigarettes and respiratory drugs within four years, up from about a quarter today. PMI currently sells cigarettes in more than 175 markets.

Vectura has manufactured 13 inhaled medicines for companies such as Novartis and GlaxoSmithKline to treat lung conditions including asthma.

Health care charities have objected to the £1 billion ($1.4 billion) takeover.

Kjeld Hansen, chair of the European Lung Foundation, said he was "very disappointed" to see the deal finalized.

"The prospect of someone potentially profiting from selling one product that harms the lungs and another that treats the lung disease it causes is beyond worrying," Hansen said in a statement on Thursday. "For someone living with a lung condition, the sale is devastating."

The iPhone 13's secret weapon is, surprisingly, its price

Apple's new iPhone 13 and 13 Pro lineup features all of the predictable upgrades: faster performance, longer lasting battery life, better screen and new colors.

The biggest surprise? Its price, my CNN Business colleague Samantha Murphy Kelly reports.

Apple kept the cost of its iPhones mostly in line with last year's models, despite rumors they'd be more expensive because of issues with the supply chain for computer chips.

Massive discounts and trade-in offers from US carriers are available, too. AT&T, for example, is offering up to $1,000 toward a new iPhone 13 Pro and Pro Max after a trade-in, while Verizon is touting as much as $800 off any new iPhone, essentially paying for the cost of a 128 GB iPhone 13. (WarnerMedia, the parent company of CNN, is owned by AT&T.)

Apple also continues to offer iPhones at a wide range of prices to appeal to more customers.

"Apple has become the king of the 'good, better, best' portfolio with a phone at every relevant price point, particularly given it typically keeps older models in its line-up for those that don't want to pay four figures for the latest and greatest new devices," said Ben Wood, chief analyst of market research firm CCS Insight.

Investor insight: Pricing options will be vital in encouraging even more people to upgrade their devices, allowing Apple to continue its hot selling streak. So far, investors are in wait-and-see mode, with shares falling 0.4% since Tuesday's launch event.

Up next

US retail sales for August and initial US jobless claims from last week post at 8:30 a.m. ET.

Coming tomorrow: Consumer sentiment data from the University of Michigan.

The-CNN-Wire
™ & © 2021 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

St. Joseph
Cloudy
45° wxIcon
Hi: 61° Lo: 35°
Feels Like: 40°
Maryville
Clear
43° wxIcon
Hi: 61° Lo: 34°
Feels Like: 39°
Savannah
Cloudy
45° wxIcon
Hi: 61° Lo: 34°
Feels Like: 40°
Cameron
Partly Cloudy
45° wxIcon
Hi: 60° Lo: 35°
Feels Like: 41°
Atchison
Partly Cloudy
43° wxIcon
Hi: 62° Lo: 33°
Feels Like: 38°
Patchy dense fog is also across the area this morning. Sunshine and mild temperatures will take over this afternoon with highs in the mid 60s. Saturday will start off dry and sunny with temperatures warming back into the mid 60s. Late Saturday into Sunday shower and thunderstorm chances return. A few thunderstorms could be on the strong to severe side. Several fronts will move through the area next week giving us roller coaster temperatures. Next week looks to start off dry but rain chances will return by mid week.
KQTV Radar
KQTV Temperatures
KQTV Alerts

Community Events