Tags: Barr | spending | divide | shoppers

PwC's Barr: 'The Spending Divide Among Shoppers is Widening'

By    |   Wednesday, 26 November 2014 01:57 PM

Given that the inequality of income is growing, it probably won't surprise you that the same trend is playing out for holiday sales.

While many experts predict holiday sales will rise 4 percent or more this year, little of that boost will likely come from those lower down the income totem pole.

"People, especially at the lower-income levels, were extremely hard hit with jobs," Vishwa Chandra, a principal in the retail practice of consulting firm A.T. Kearney, told CNBC. "They're cautious to sort of really start to spend."

While unemployment has dropped to a six-year low of 5.8 percent, average hourly wages rose only 2 percent in the 12 months through October.

People who earn less than $50,000 a year plan to spend $516.95 for the holidays, up only $5.15, or 1 percent from last year, according to the National Retail Federation. But those earning more than $50,000, will spend $1,055.39, up $46.75, or 4.6 percent.

"The spending divide among shoppers is widening," Steve Barr, U.S. retail and consumer practice leader for PwC consulting firm, told CNBC.

When it comes to the overall picture, stronger-than-expected third-quarter sales at retailers such as Walmart, Best Buy, Williams-Sonoma and Target have some experts bullish on holiday sales.

Lower gas prices and rising consumer confidence are helping, according to Poonam Goyal, an analyst with Bloomberg Intelligence.

"Everyone’s optimistic, and there’s really no reason they shouldn’t be," she told Bloomberg News. "If someone [a retailer] disappoints this year, something is wrong."

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Given that the inequality of income is growing, it probably won't surprise you that the same trend is playing out for holiday sales.
Barr, spending, divide, shoppers
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2014-57-26
Wednesday, 26 November 2014 01:57 PM
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