US holiday sales may get 3-4% boost in Nov-Dec 2023

Despite a slower growth rate compared with the past three years, when trillions of dollars of stimulus led to unprecedented rates of retail spending during the pandemic, this year’s holiday spending is consistent with the average annual holiday increase of 3.6 per cent from 2010 to 2019, NRF said in a press release.

“It is not surprising to see holiday sales growth returning to pre-pandemic levels,” said NRF president and CEO Matthew Shay. “Overall household finances remain in good shape and will continue to support the consumer’s ability to spend.”

Online shopping has been one of the biggest shifts in consumer behaviour from the COVID-19 pandemic. Online and other non-store sales, which are included in the total, are expected to increase between 7–9 per cent to a total of between $273.7–$278.8 billion. That figure is up from $255.8 billion last year.

NRF chief economist Jack Kleinhenz said, “Consumers remain in the driver’s seat, and are resilient despite headwinds of inflation, higher gas prices, stringent credit conditions, and elevated interest rates. We expect spending to continue through the end of the year on a range of items and experiences, but at a slower pace. Solid job and wage growth will be contributing factors this holiday season, and consumers will be looking for deals and discounts to stretch their dollars.

“For all that the consumer has kept the economy afloat, the composition of spending from goods to services will also define holiday sales trends. Service spending growth is strong and is growing faster than goods spending. The amount of spending on services is back in line with pre-pandemic trends.”

To meet the demand of the holiday season, the NRF expects retailers will hire between 345,000– 450,000 seasonal workers, in line with 391,000 seasonal hires in 2022. Some of this hiring may have been pulled into October to support retailers’ holiday buying events in October.

Despite months of preparation for the holiday season, retailers could sustain unpredictable impacts from weather. This year, holiday retail spending may experience residual effects from El Nino, depending on the strength and persistence of the weather phenomena.

NRF’s holiday forecast is based on economic modelling that considers a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit, and previous retail sales. NRF’s calculation excludes automobile dealers, gasoline stations, and restaurants to focus on core retail. NRF defines the holiday season as November 1–December 31.

Fibre2Fashion News Desk (NB)