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Dive Brief:

  • Anticipating holiday sales to be “healthy even with recent inflationary challenges,” the National Retail Federation is forecasting retail sales in November and December will grow from 6% to 8% compared to last year, according to a press release. 2021 seasonal sales grew 13.5%, “shattering previous records” according to NRF. 
  • Predicting a total of between $942.6 billion and $960.4 in sales this year, the NRF said that online and other non-store sales will specifically grow between 10% and 12% reaching between $262.8 billion and $267.6 billion. The trade group said that while e-commerce will remain important this season, in-store shopping will be more prevalent compared to 2021. This forecast does not account for automobile dealers, gasoline stations and restaurants.
  • The NRF forecast does not account for expected inflation rates. An organization spokesperson said it forecasts “positive real” inflation adjusted growth for the holiday season. The September inflation rate was at 8.2%.

Dive Insight:

The NRF is predicting “healthy holiday sales” despite growth slowing compared to last year.

“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,” Matthew Shay, NRF president and CEO, said in a statement. “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.”

NRF Chief Economist Jack Kleinhenz added that “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.”

Other forecasts have said that sales growth this season is connected to the increased prices consumers face due to inflation.

Deloitte’s holiday sales forecast released in September also predicted a slowdown in growth compared to last year, and added that an increase in sales this year will be connected to higher prices.

“As inflation weighs on consumer demand, we can expect consumers to continue to shift how they spend their holiday budget this upcoming season,” Nick Handrinos, vice chair of Deloitte LLP, and U.S. retail, wholesale and distribution, and consumer products leader, said in a statement at the time. “Retail sales are set to increase as a result of higher prices, and this dynamic has the potential to further drive e-commerce sales as consumers look for online deals to maximize their spending.”

Consumers will likely alter how they shop this year based on macroeconomic conditions. Deloitte also predicted that low-income shoppers are planning to spend more this season (a 25% increase year over year) while higher-income consumers plan to pull back on their spending (a 7% decrease). 

Against the pressure of inflation, a study from Oracle Retail released last month showed that over 70% of its 8,107 respondents said they are considering financing plans for their shopping this season. A study from Bluedot also showed that nearly half (48%) of its Gen Z respondents plan to use buy now, pay later services for the holidays.

The NRF also noted that weather will play a significant role in how the season turns out. The trade organization said that parts of the northern tier of the country could experience wetter and snowier conditions this season, based on information from the National Oceanic and Atmospheric Administration.

The organization also forecasted that hiring for the holidays will slow in retail, predicting between 450,000 and 600,000 seasonal workers this year compared to 669,800 in 2021. 


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