Inflation Effects Set to Kneecap Retailers’ 2022 Holiday Outlook, and Beyond

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What a difference a year makes.

Consulting giant McKinsey & Co. released the results of a consumer survey last fall that bore this bubbly headline: “Shoppers are feeling spendy and social.” McKinsey said half of those reporting annual earnings of at least $100,000 were, “excited or eager about the holidays.” It turned out to be a good call. Despite the pandemic and its many complications, the US Census Bureau’s final tally showed annual retail sales grew in 2021 by a whopping 18 percent over 2020.

The headline this year? How about, “Shoppers are tapped out, exhausted, and gloomy?” I am not sure that statement is accurate either.

The principal villain is inflation, but the problem runs far deeper than the price of gas or groceries. Interest rates are spiking. That means the cost of credit card debt is surging and, as the Federal Reserve recently promised, is expected to continue to rise as the central bank acts to keep inflation from worsening.

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retail  Holiday Shopping  inflation

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