Holiday sales preview: Best Buy could be a winner while Signet could struggle
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U.S. retail sales are forecast by Mastercard SpendingPulse to rise 3.7% year-over-year this holiday season. The anticipated growth in retail in the U.S. is said to reinforce continued consumer resilience in the face of inflation, high interest rates, the resumption of student loan payments, and other macroeconomic headwinds. 
After years of inventory and spending habits being in flux, the 2023 season is anticipated to bring a broader rebalancing across categories, channels, and sectors in alignment with macroeconomic trends.
âWhile the consumer of holidays past may have been a consumer trying to find footing in a rapidly shifting economy, the consumer of holidays present has taken their power back,â said Michelle Meyer, U.S. Chief Economist, Mastercard Economics Institute. âWe expect these individuals to impressively navigate the holiday season, making choices and trade-offs that best suit their lifestyles," she added.
E-commerce sales expected to increase +6.7% year-over-year, and in-store sales to increase +2.9% year-over-year. That is a smaller gap than in during the pandemic years when Amazon (NASDAQ:AMZN), Etsy (ETSY), and Wayfair (W) saw huge sales gains.
The expectation is that electronics, gadgets and gaming might be at the top of many wish lists this year as AI, immersive experiences and digital workspaces continue to evolve the way consumers work and play. In addition, consumers who purchased new gadgets during the pandemic could be looking to upgrade to the latest model. Electronics are anticipated to increase +6.0% Y/Y this season, which would be a positive development for Best Buy (BBY).
The restaurant sector is expected to continue its growth streak, increasing +5.4% year-over-year and outpace grocery growth (+3.9%), as consumers make plans to gather around tables.
Apparel sales are only seen rising 1.0% as the challenges may continue for department store operators such as Nordstrom (JWN), Kohl's (KSS), Dillard's (DDS), and Macy's (M). Jewelry sales are forecast to drop 0.3% in a potential negative omen for Signet Jewelers (SIG).
The holiday sales report is also of high interest to merchandisers such as Walmart (WMT), Target (TGT), and Costco (COST).

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