“We expect that the 2019 holiday season will see healthy U.S. retail spending growth of 3.7 [percent] to $1.035 trillion,” offered eMarketer in a late February, 2019 forecast. “However, with several economic factors now weighing on the consumer economy, this growth rate represents a noticeable deceleration vs. 2018.”
Indeed, if things were to ultimately pan out as per the above prediction, that uptick in spending is considerably less than the 5.4 percent increase in retail purchases that occurred leading up to the holidays in 2018. And the likelihood of that comparatively modest 3.7 percent growth prediction may be growing slimmer.
At the beginning of August, a proposed 10 percent tax on $300 billion worth of Chinese imports, initially to go into effect on September 1, had many predicting a downright dire holiday buying season.
In a Washington Post article from August 2 of this year, authors Abha Bhattari and Taylor Telford observed, with respect to ongoing trade skirmishes between the U.S. and China and additional tariffs then-slated to go into effect in the fall, “While consumers have been largely shielded from earlier tariffs, the newest round would raise prices on just about everything Americans buy. More than 60 percent of the affected items are consumer goods, according to an analysis by Goldman Sachs.”
However, it was than announced on August 13 that the imposition if those tariffs would be delayed until December 15. “I think the president wanted to avoid being the Grinch who stole Christmas,” speculated Mark Zandi, chief economist of Moody’s Analytics. “These delayed tariff hikes would have landed squarely on American consumers.”
How is MI effected? Well, a lot of that depends on what instruments and gear you stock and where those items are sourced from. Taxes, tariffs, and trade wars may exert pressures on the musical instrument industry, but it’s far less vulnerable than, say, makers of shoes, video game consoles, clothing, and toys.
What this does mean – regardless of your personal politics or philosophies – is that the time to get going with your holiday sales promotions is sooner than later. Some folks may grumble about seeing Christmas decorations put up in stores and malls earlier and earlier every year, but in 2019 there may be quite fewer last-minute holiday shoppers and many more who aim to completely wrap up their gift purchasing prior to mid-December.
In light of that, do be sure to check out our 2019 Holiday Buying Guide on page 44 for some great ideas on what to stock in order to capitalize on what could turn out to be something of a truncated season!
