The National Retail Federation has forecast consumer spending in the main holiday shopping season November 1 through December 31 will grow between 2.5% and 3.5% compared to the 2023 period. The forecast calls for $979.5 billion to $989 billion in total holiday sales versus $955.6 billion during the same period last year.
The NRF holiday prediction is consistent with the organization’s forecast for 2024 annual sales growth of 2.5% and 3.5% against 2023 sales.
NRF expects e-commerce to be a main contributor to overall retail sales growth in the holiday season. Online and other non-store sales are included in forecast total numbers, and, called out as a shopping channel, the non-store segment should generate a sales increase between 8% and 9% to a total of between $295.1 billion and $297.9 billion. Non-store sales in the 2023 holidays were $273.3 billion in the 2023 season, up 10.7% from 2022, according to NRF.
On the holiday labor front, NRF anticipates retailers hiring between 400,000 and 500,000 seasonal workers this year, with some job openings pulled into October to support retailers’ early holiday promotional events. Retailers hired 509,000 seasonal workers in 2023, NRF noted.
The 2024 main holiday shopping period between Thanksgiving and Christmas will be 26 days, six days shorter than it was in 2023 which could affect consumer outlays. In addition, the economic impact of Hurricanes Helene and Milton could negatively impact holiday spending in some areas of the United States, according to NRF.
NRF’s holiday forecast is based on economic modeling using key economic indicators including consumer spending, disposable personal income, employment, wages, inflation and previous monthly retail sales releases, the organization stated. Its calculation excludes automotive dealers, gasoline stations and restaurants to focus on core retail.
In addressing a conference call question, NRF noted that inflation could represent two percentage points of the year over year gain in holiday spending, although it noted inflation had leveled off in general merchandise categories, with prices declining in some segments, as it continued gaining in services. As such, the two points was the likely maximum impact, and research indicated actual dollar and unit sales are set to gain in the holiday season.
NRF Chief Economist Jack Kleinhenz said generally positive numbers on jobs and consumer financial health are positive signs for the season. He added consumers’ “persistent” spending despite inflation concerns was another indicator holiday sales are likely to advance.
“The economy remains fundamentally healthy and continues to maintain its momentum heading into the final months of the year,” NRF President and CEO Matthew Shay. “The winter holidays are an important tradition to American families, and their capacity to spend will continue to be supported by a strong job market and wage growth.”
Kleinhenz added, “We remain optimistic about the pace of economic activity and growth projected in the second half of the year. Household finances are in good shape and an impetus for strong spending heading into the holiday season, though households will spend more cautiously.”
