Expect a tale of two holiday seasons as the well-off spend and the rest pull back | Gene Marks
Will retailers and merchants have a strong holiday season? That depends.This year, more than most, the 2025 holiday season will actually be two holiday seasons.If your business caters to higher-income individuals or if you’re located in a wealthier part of the country, you’ll probably have a decent holiday season.True, even the wealthy are cutting back.But according to the HR firm ADP average salaries have risen between 4.
5% and 6.7% depending on whether workers stayed or switched jobs.The stock markets, though increasingly volatile, are up over 13% since the beginning of the year.And in some parts of the country, notably New York, Boston, DC and San Francisco, the average household income is over $125,000 - almost $41,000 higher than the national average.People in this demographic may be a little more cautious but they’ll spend.
Don’t believe me? Just take a walk in or near Soho, Georgetown, Presidio Heights or Beacon Hill,Restaurants selling $49 chicken parms and $16 baked potatoes … and they’re full,Vegas steakhouses are still getting $165 for a porterhouse – and the tables are packed,I searched for a room recently near Dana Point, California, and the Marriott there was sold out … at $750 a night!But for many others? That’s a different story,Another analysis from the HR giant Paychex reports that rises in hourly wages – those mostly earned by blue-collar workers – have been tracking below 3% for over a year (it’s currently at 2.
58%).According to Van Hesser, the chief strategist at credit rating analysis agency KBRA, the top 10% of earners account for 50% of spending.But the rest? They’re not going to spend as much this year.They’re already riddled with credit card debt.They’re mostly not participating in the stock market boom.
They are barely making rent, let alone splurging on holiday gifts.That doesn’t mean the remaining 90% of the US won’t be visiting stores.But it’s guaranteed that they’ll be spending less.Costs are much higher.Promised tax rebates and pie-in-the-sky “tariff” refunds aren’t happening this year.
And with millions losing their jobs this year alone thanks to corporate mismanagement, restructurings, profit-taking and the creepage of AI, the next few years are sure to be uncertain.The annual major surveys of retail sales are telling us just that.For example, an S&P Global Ratings report expects holiday sales (November-December) will grow 4% in 2025 from 2024, but thanks to weaker consumer confidence on the “uncertain macroeconomic outlook” those researchers say that most of these sales increases won’t be volume related, but due to increased prices that actual retail spending when you take out inflation will “remain relatively flat”.The consulting giant Deloitte is projecting that holiday retail sales will grow between 2.9% and 3.
4% in 2025.But this is well below the 4.2% from last year’s growth and below the 10-year average of 5.2%.The reasons given are all the same: tariffs, inflation, uncertainty.
“It’s a tale of two economies,” said KRBA’s Hesser.“While wealthy consumers continue spending, the less wealthy are pulling back – evidenced by earnings misses from fast-casual dining (Chipotle, Cava) and decade-high unemployment for recent college graduates.”Hesser also warns that the negative wealth effects that could come from an equity market correction “can create headwinds across the entire consumer landscape, from staples to discretionary categories like travel and leisure – especially as we head into the holiday season”.So how will small businesses – my clients - fare this holiday season? Considering that for most, holiday sales make up as much as half of their annual revenue, it’s a very important question.I’m sure the usual crowds will be out supporting them on Small Business Saturday.
And for those doing business to the right demographic – the top 10% of earners, they’ll be fine.Or if they’re located in the more affluent areas of New York, Boston, DC and San Francisco they’ll be fine too.Others may have more of a challenge this year.
Harrods warehouse staff underpaid by thousands of pounds after agency error
Harrods warehouse staff have been underpaid thousands of pounds after the temporary recruitment agency employing the workers failed to award them the correct levels of holiday pay.The error, which possibly equates to a six-figure debt owed to hundreds of lower-paid personnel, marks the latest setback to the image of the exclusive Knightsbridge retailer, which is owned by Qatar’s sovereign wealth fund and has spent the past 12 months firefighting a series of crises.The recent difficulties have included Harrods establishing a compensation scheme in March for survivors of alleged sexual abuse by the former owner Mohamed Al Fayed, while in May the department store warned customers their personal data may have been taken after a high-profile IT breach.Harrods warehouse workers were underpaid by The Best Connection, a temporary staffing agency that employs the staff and then supplies them under contract to Harrods.The discovery is understood to have been made after two years of warnings to Harrods that the pricing of The Best Connection’s services raised questions if it was lowballing tender offers to corporate customers, only to make back any missing margin from lower-paid workers
Airbus issues major A320 recall after mid-air incident grounds planes, disrupting global travel
Airlines around the world cancelled and delayed flights heading into the weekend after Airbus announced on Friday that it had ordered immediate repairs to 6,000 of its A320 family of jets in a recall affecting more than half of the global fleet.The European Union Aviation Safety Agency (EASA), which is the main certifying authority for A320 aircraft, issued the instruction on Friday night as a precautionary action, saying that “safety is paramount”.The US Federal Aviation Administration also issued an emergency airworthiness directive for certain Airbus planes, requiring the aircraft to replace or modify specific software.The fix mainly involves reverting to earlier software and is relatively simple, but must be carried out before the planes can fly again, according to the bulletin to airlines seen by Reuters.Of the 6,000 jets affected, a sub-set will need a time-consuming hardware change rather than a quick software fix, though the number that require more extensive fixes was smaller than the initial estimates of 1,000, Airbus said
US small businesses sound alarm over Trump’s tariffs amid crucial holiday season
Donald Trump’s tariffs have increased prices on an array of popular holiday goods and driven a “massive” number of small firms out of business, industry leaders have warned.On Small Business Saturday, firms have their fingers crossed that strong holiday sales will ease the impact of a tough year. But many aren’t holding their breath.“My husband and I have invested a lot of our retirement money into this business,” Joann Cartiglia, owner of Queen’s Treasures, a toy company in Ticonderoga, New York, during a press briefing organized by We Pay the Tariffs, a coalition of small businesses, this week. “And now I have absolutely no hope of retirement
Soon-to-be-axed 7am Manchester-London train will still run – but without passengers
The good news for rail travel between Manchester and London is that a morning train will continue to link the two cities in under two hours. The bad news: passengers will no longer be able to get onboard.The rail regulator has axed one of Britain’s fastest and most lucrative intercity services, the 7am Avanti West Coast from Manchester Piccadilly to London Euston, as part of a timetable shake-up that will take effect in mid-December.What will heap on frustration for passengers, as well as the operator, is that the exact same train service will continue to run between the stations from 7am each weekday: crewed, fast and empty.The train and staff still need to travel from Manchester as they are rostered to operate subsequent services out of Euston on the new December timetable, under rail’s complex planning
Jetstar cancels 90 domestic flights across Australia after global Airbus A320 recall
Jetstar has grounded some of its Airbus fleet in Australia and cancelled domestic and international flights after the aerospace manufacturer ordered software changes to thousands of its A320 planes following a mid-air incident.Ninety Jetstar flights were affected on Saturday with disruption expected to continue until Sunday, the airline’s head of flying operations, Tyrone Simes, told reporters at Melbourne airport.Airbus said on Friday it was ordering an immediate software change on a “significant number” of its bestselling A320 family of aircraft, a narrow-body plane which is also used by Virgin Australia and Qantas.Simes said on Saturday Airbus had issued Jetstar with a maintenance directive to reverse a software upgrade that had been installed on some planes and resulted in a malfunction.He said 34 of Jetstar’s 85 Airbus fleet were affected, but engineers could complete the software update on the ground in Australia, which would take about two to three hours for each plane
UK at risk of ‘sudden confidence crisis’ if markets lose faith in budget – as it happened
UK government borrowing costs have inched down today, as the bond markets continue to welcome the budget.The yield (or interest rate) on 10-year gilts has dipped by 1.5 basis points to 4.44%, while 30-year gilt yields are down 3.5bps
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