Holiday Sales Expected To Top $957 Billion, Up More Than 3% Over 2022

Holiday retail sales are expected to grow by between 3% and 4% this year, with record spending of more than $957 billion according to the National Retail Federation’s annual holiday forecast.

The retail group is predicting that Americans could spend as much as $30 billion more than last year this holiday season if sales reach the top end of its forecast.

But it is expecting spending to be far more subdued than the boom years of the pandemic, when spending rose at an accelerated pace.

The NRF said that while the percentage increase will be significantly lower in 2020, 2021, and 2022, consumers still are expected to do a healthy amount of spending.

“In spite of the uncertainty in the economy and the challenges that households are facing, we’ve seen strength and resilience across the consumer sector,” NRF President and CEO Matthew Shay said in a press conference to announce the results.

Spending Growth

Spending growth is expected to be comparable to the average 3.5% annual holiday growth of the pre-pandemic years, Shay said.

That is well below the 5.4% holiday season growth in 2022, and the 14.1% spike in 2021 and the 8.2% boost in 2020.

The NRF’s annual forecast is a closely watched indicator of the outlook for the nation’s merchants heading into the crucial holiday season. The group has been issuing its forecast for two decades.

Last year’s holiday sales fell a bit short of the predictions. Sales rose 5.4% over the previous year, below the NRF forecast of 6% to 8% growth.

Impacts On Consumer Spending

NRF Chief Economist Jack Kleinhenz said a strong job market and wage gains are the chief factors keeping consumers spending, despite concerns about the overall economy.

Economists have been predicting all year that a spending slowdown was on the horizon, but consumers have turned out to be more resilient than most forecasters expected.

September retail sales numbers turned out to be a positive upside surprise, rising 0.7 month-over-month, more than twice the expected gain.

Most of the early holiday spending forecasts thus far have ranged from cautiously optimistic to upbeat.

Adobe
ADBE
predicted in early October that online sales would grow by 4.8% this holiday season, outpacing last year’s gain of 3.5%

ICSC, the trade group representing malls, shopping centers, and other marketplaces, predicted last month that holiday retail sales will be up 3.8%, with food and beverage sales up 7.6%.

Deloitte is forecasting that consumers will be “back in the spirit of spending” this holiday season, with spending levels beating pre-pandemic levels.

The NRF last month reported that consumers surveyed about their spending intentions said they planned to spend an average of $875 on holiday gifts, decorations, food, and related items, $42 more than last year’s average.

Consumers said the bulk of their spending – an average of $620 – will be spent on gifts.

Gift cards were mentioned by those surveyed as the most popular gift, with 55% saying they would like to receive them, followed by clothing and accessories (49%), books, video games and other media (28%), and personal care and beauty items (25%). Close to one-quarter of consumers (23%) said they plan to give an experience gift this year, up from 19% in 2021.