(Reuters) – U.S. holiday sales are expected to grow at their slowest pace in six years, data from Deloitte showed on Thursday as persistent inflation and dried up savings turn shoppers more frugal for the all-important shopping period.

Holiday retail sales are likely to rise between 2.3% and 3.3% in the November 2024-January 2025 period, totaling up to $1.59 trillion, data report said, from a 4.3% growth to $1.54 trillion last year.

Sales grew 3.1% in 2018.

WHY IT’S IMPORTANT

Holiday season sales generally account for more than half of U.S. retailers’ annual revenue.

A shorter season this year – with only 27 days between Thanksgiving and Christmas – has pushed retailers into launching higher promotional discounts earlier in the season.

CONTEXT

Consumers across all income brackets have been hit by lower personal savings, which dipped to about 3.4% in the recent months, compared to an average of 3.8% in June this year, according to the report.

Customers are expected to begin bargain hunting early, looking for additional discounts across categories including groceries and homegoods, as they tighten their purse strings.

BY THE NUMBERS

Deloitte expects e-commerce sales to rise in the 7%-9% range in the 2024 holiday season, totaling up to $294 billion, compared with the 10.1% increase to $270 billion last year.

In-store sales are expected to rise between 1.3% and 2.1% to up to $1.3 trillion in the upcoming holiday season, compared to a rise of 3.1% to $1.27 trillion, a year ago.

KEY QUOTES

“Rising credit card debt and the possibility that many consumers have exhausted their pandemic-era savings will likely weigh on sales growth this season compared to the previous one,” said Michael Jeschke, leader of Deloitte Consulting’s Retail & Consumer Products.

“Our forecast indicates that e-commerce sales will remain strong as consumers continue to take advantage of online deals to maximize their spending.”