Adobe expects U.S. online holiday sales to rise 2.5% this year to $209.7B.
The forecast for the holiday period of November 1 to December 31 may have been higher if not for some sales being pulled forward into October with Amazon ( AMZN ) with holding a second Prime Day event on October 11-12 and other retailers matching the early promotional push.
The tepid holiday forecast is also being attributed to the uncertain economic environment as shoppers contend with elevated prices offline (food, gas, housing) and the rising cost of borrowing.
Cyber Monday is still expected to be the biggest shopping day of the year with $11.2B in sales racked up to represent 5.1% growth from a year ago. Black Friday online sales are projected to grow by just 1% year-over-year to $9B, while Thanksgiving sales are seen falling 1% to $5.1B.
Adobe noted that electronics, apparel and groceries will contribute $103.8B in online spending this holiday season, nearly half of what Adobe expects for overall spending . The categories are said to have emerged as major revenue drivers online.
Adobe expects electronics sale to be up 2.9% with heavy discounting attracting shoppers, but hurting margins. Apparel spending is seen falling 6.7%. The grocery category is seen growing 10.5% year-over-year with higher pricing a factor,
For investors, Adobe warns that discounts will hit record highs this holiday season, as retailers contend with oversupply and a softening consumer spending environment. The list of companies that could be hurt by clearing inventory through discounting includes Best Buy ( BBY ), Target ( TGT ), Nike ( NKE ), Dick's Sporting Goods ( DKS ), Macy's ( M ), Nordstrom ( JWN ), Peloton Interactive ( PTON ), and even Walmart ( WMT ).
For further details see:
Holiday online sales are forecast to rise but discounting will be 'massive'