NRF Forecasts Solid Holiday Sales Growth
Consumer spending during the holiday season is forecast to increase over 2021 as shoppers continue to open their wallets despite facing economic headwinds, the National Retail Federation (NRF) said in its annual holiday forecast.
With the year-end shopping season now covering all of November and December, the NRF anticipates sales during the final two months of the year to grow between 6% and 8%, totaling between $942.6 billion and $960.4 billion. This follows 2021 when holiday sales were up 13.5% and totaled $889.3 billion.
Over the past 10 years, holiday retail sales have increased an average of 4.9%. Additionally, consumers said they expect to spend $832.84 on average for gifts and holiday items such as decorations and food, in line with the average for the last 10 years.
“While consumers are feeling the pressure of inflation and higher prices, and while there is continued stratification with consumer spending and behavior among households at different income levels, consumers remain resilient and continue to engage in commerce,” said Matthew Shay, president and CEO of the NRF. “In the face of these challenges, many households will supplement spending with savings and credit to provide a cushion and result in a positive holiday season.”
The NRF expects online and other non-store sales, which are included in the total, to increase between 10% and 12% to between $262.8 billion and $267.6 billion. This compares to total online and non-store sales of $238.9 billion in 2021.
While ecommerce will remain important, households are also expected to shift back to in-store shopping and a more traditional holiday shopping experience, NRF officials said.
“This holiday season cycle is anything but typical,” said Jack Kleinhenz, NRF’s chief economist. “NRF’s holiday forecast takes a number of factors into consideration, but the overall outlook is generally positive as consumer fundamentals continue to support economic activity. Despite record levels of inflation, rising interest rates and low levels of confidence, consumers have been steadfast in their spending and remain in the driver’s seat.”
As has been the case in recent years, consumers have started their holiday shopping earlier this year. Retailers are responding to this on-going trend by holding promotions related to holiday shopping in October.
“While this may result in some sales being pulled forward, we expect to see continued deals and promotions throughout the remaining months,” Kleinhenz said.
NRF's holiday forecast is based on economic modeling that considers a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit, previous retail sales and weather. Its calculation excludes automobile dealers, gasoline stations and restaurants to focus on core retail. NRF defines the holiday season as November 1 through December 31.