The holiday shopping season may not be as cheerful for retailers this year, with a recently released report suggesting they may see less growth in sales over the festive period.

The growth rate of holiday sales will be around 3% this year, S&P Global Ratings predicted in “US Holiday Sales Outlook 2024“, the report published on Tuesday.

That marks a slower pace than 2023, when holiday sales rose 4.7 percent, according to the report.

A shopper carries bags at Polaris Fashion Place during Black Friday in Columbus, Ohio, U.S., Friday, Nov. 24, 2023. An estimated 182 million people plan to shop from Thanksgiving to Cyber​​​​ Monday, the most since 2017. acc (Matthew Hatcher/Bloomberg via Getty Images/Getty Images)

S&P Global Ratings suggested retailers will “rely on deals to bring holiday cheer” and invest more money in advertising to attract more shoppers.

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Some companies have already started rolling out discounts ahead of the holidays, which the report says could do to “pull sales” as shoppers “become more cautious in the weeks leading up to the holiday, particularly during an election year and a of shortened holiday shopping.”

Retailers are likely to hold more “deal events” ahead of Black Friday and Cyber ​​Monday, according to S&P Global Ratings. In 2024, the two majors after Thanksgiving shopping dates will fall on November 29 and December 2, respectively.

Hand holding smart phone with black friday sale on screen device over blurred background, business and technology, online shopping, digital marketing concept (iStock/iStock)

When it came to the consumer, S&P Global Ratings characterized them as “price sensitive” and expected them to “maintain tight budgets and look for value in the form of promotions as they enter the holiday season” in the context of the current economy and market work.

For the 2024 holiday season, cost-cutting and inventory management strategies will “largely offset promotional pressures” and help retailers see “flat margins,” according to the report.

S&P Global Ratings said retailers that “have the financial flexibility to compete on price and convenience will continue to do better” during the holiday season.

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The report predicted that value retailers that “target more resilient consumers with middle and higher incomes” and large retailers with “the ability to effectively communicate value to consumers” will fare better during the holiday season than other types.

“We expect other sectors, such as department stores and apparel retailers, to rely on deeper discounts to increase traffic and manage inventory,” it said. “Furthermore, weak demand in specialty categories such as consumer electronics and home furnishings will also require promotional activities for spark request.”

Black Friday, Woman holding many shopping bags while walking on shopping mall background. (iStock/iStock)

Retailers that sell a lot of discretionary products, such as department stores and furniture, “will rely on promotions to drive demand” and “risk a disappointing holiday season” if they don’t, according to S&P Global Ratings .

During November and December, U.S. retailers are expected to see $979.5 billion to $989 billion spent by holiday shoppers, the National Retail Federation separately predicted.

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A recent Bankrate survey indicated that 37 percent of holiday shoppers planned to start spending in November. About 15 percent plan to wait until December to open their wallets, it found.

Meanwhile, 48 percent said they want to start their seasonal shopping by Halloween.