Alabama’s retailers are expecting a holiday shopping season on par with last year – but that continues a surprising trend stretching back five years.
The Alabama Retail Association expects holiday sales of about $18.5 billion over the final two months of 2024.
What is that based on? Looking at Alabama Revenue Department abstracts, taxed sales in Alabama were down a half percent through the first eight months of 2024. A 1% reduction in the tax rate on food, starting last September, explains the decline in sales tax collections.
The Alabama Retail Association’s holiday spending prediction covers all taxed sales, including those from remote sellers, during the months of November and December.
How were last year’s sales? According to the ARA, Alabamians spent 2.8% more during last year’s holiday season than they did over those same two months in 2022. For all of 2023, Alabama retail sales grew 3.42%.
Last year, the association projected holiday spending in Alabama near $18.75 billion.
What about the Birmingham metro area? A flat holiday season for spending might actually be a positive. The University of Alabama’s Culverhouse College of Business’ Alabama Business Confidence Index for the fourth quarter saw numbers all over the place among Alabama’s metros. The most pessimistic outlook, according to the survey, was in the Birmingham-Hoover area, which had a mildly negative outlook with regard to hiring, capital spending, and the national outlook. Tuscaloosa and Huntsville were higher.
What about nationally? The National Retail Federation expects winter holiday spending to grow between 2.5% and 3.5% nationally over 2023. That projection leaves out automobile, gasoline and restaurant food sales, while the Alabama Retail Association’s just excludes gasoline sales.
Are there any surprises? For the past five holiday seasons in Alabama, sales have grown an average of 7% each year – that’s despite the economic upheavals of the COVID-19 pandemic and persistent inflation. From 2019 to 2023, sales in the final two months of the year grew almost 40%.
Key point: The Alabama Retail Association’s #ShopAlabama campaign is encouraging shoppers to look locally to their community retailers.
“The stores down the street or around the corner support your community in big and small ways daily,” Association President Rick Brown said. “By shopping with retailers based in your community or our state, you contribute to the health of your local and state economies.”
