According to ICSC’s shopping forecast, retail sales should grow 3% to 3.5% during the holidays, even as the organization’s shopping intention study predicts that more consumers will be out shopping this season.
The shopping forecast from the former International Council of Shopping Centers projects a 6% increase in food-and-beverage spending besides the retail sales gains, bringing the total expected spend for the season to $1.66 trillion.
The ICSC Annual Holiday Shopping Intentions Survey determined that 241 million, or 92%, of consumers, plan to shop for the season this year, six million more than in 2023 and the highest percentage since 2019.
Holiday shoppers intend to spend an average of $706 on gifts and related items, the highest figure since 2018, ICSC pointed out. Yet despite lower inflation, higher prices continue to weigh on consumers such that nine in ten holiday shoppers said inflation would impact their purchases. Indeed, 37% of shoppers said they plan to spend more this year, with 42% attributing the larger dollar outlay to higher prices.
With costs on their minds, most consumers plan to spend more time looking for deals, with almost half surveyed saying they would take advantage of deals and promotions. Deal hunting will affect how consumers shop, with 68% agreeing that searching for discounts or exclusive offers during the holiday season will encourage them to make more trips to physical stores, an increase of seven percentage points over last year. Then, many consumers are tapping loyalty programs to save, with 65% of survey respondents expecting membership and rewards programs to influence their purchases.
As they get into their holiday shopping, 92% of consumers said they would shell out money in a physical store. The survey results suggest that bricks-and-mortar remains a valuable driver of omnichannel operations, as nearly all in-store shoppers also plan to buy online from the same retailer’s website, ICSC noted, with almost half saying that browsing in stores will influence their purchases. Visiting malls and shopping centers to browse, dine, and take advantage of other available experiences and services is also a mainstay of the holiday season for 200 million consumers, ICSC added, particularly for GenZers and Millennials.
As has been the case in recent years, 78% of holiday shoppers said they plan to start seasonal shopping earlier than they might have in the past and half of those consumers cited early deals and promotions as a primary reason. The 2024 survey identified an increase of 10 percentage points in the number of people who expect to complete their shopping in the first half of December and a decrease of 14 percentage points in those planning to finish in the second half of the month, which suggests a busy spending period in the two weeks following Thanksgiving, ICSC maintained.
Most consumers will shop for gifts at discount department stores, at 63%, and traditional department stores at 33%. Gift cards, at 58%, remain the most popular category for present purchases, followed by apparel, accessories and jewelry, at 52%, and toys and games, sporting goods, and other hobbies, at 50%. A quarter of consumers anticipate gift shopping for experiences such as restaurants and dining, while 16% are considering experiential activities and 14% are thinking in terms of personal services.
“This year has shown a more reserved, yet resilient, consumer as an uncertain economic landscape and sensitivity to higher prices have impacted many households,” said ICSC president and CEO Tom McGee in announcing the research results. “At the same time, falling inflation and steady consumer spending have kept retail sales on solid footing throughout the year, and we anticipate another strong holiday shopping season. Despite economic headwinds, 70% of holiday shoppers feel their financial situation is better than or the same as this time last year, signaling measured optimism among consumers. Interest rate cuts and easing inflation are taking some pressure off holiday shoppers, but other macro factors, like geopolitical turmoil and the upcoming presidential election, are still at play.”
