The tempered forecast reflects the pressures facing both consumers and small businesses in the state. Jon Hurst, president of RAM, pointed to the high cost of living and rising operating expenses as factors dampening the outlook.
“We are asking Massachusetts’ holiday shoppers to remember that how they invest their dollars makes a big difference for the local economy,” Hurst said. “We know consumers today are cautious, and they are spending increased portions of their holiday spending budget online, but we ask them to commit to investing a good portion of their purchases right here in our communities.”
The state projection comes from an annual survey of RAM’s membership, which consists of Massachusetts small businesses. The National Retail Federation’s forecast includes retailers of all types and sizes across the country.
RAM members identified their top three challenges as lower consumer confidence, consumer price increases, and lower profitability. Rising costs for inventory, wages, benefits, and energy are squeezing margins for small businesses.
“Main Street shopping districts are challenged given foot traffic, online spending patterns, costs of doing business,” Hurst said. “It’s more important than ever that we all work harder to protect, promote, and preserve our Main Streets and our important local shopping districts.”
The shift to online shopping continues to reshape the retail landscape. About 60% of RAM members now sell online, up from 26% before the COVID-19 pandemic in 2019. For these smaller sellers, internet sales typically account for 5-15% of their holiday revenue.
This year’s projected 1.7% increase marks a slowdown from recent holiday seasons. Massachusetts saw 4% growth in 2024, 3.8% in 2023, and 1.2% in 2022.
The holiday season typically represents about 20% of annual retail sales. November and December sales in Massachusetts, excluding restaurants, auto sales, and gas, usually total around $25.3 billion. Nationally, the NRF projects holiday sales to reach between $1.01 trillion and $1.02 trillion.
RAM represents 4,000 retailers and restaurants statewide. The retail sector employs 600,000 people in Massachusetts.
