The National Retail Federation (NRF) forecasts record spending during the upcoming holiday season.
Holiday spending during November and December will grow between 3% and 4% over 2022, reaching a spending range of $957.3 billion to $966.6 billion, the retail industry advocate said in a Thursday (Nov. 2) press release.
While this growth rate is slower compared to the previous three years, it aligns with the average annual increase of 3.6% seen in the 10 years before the pandemic, according to the release.
“Overall household finances remain in good shape and will continue to support the consumer’s ability to spend,” NRF President and CEO Matthew Shay said in the release.
The NRF also expects the shift toward online shopping as a result of the COVID-19 pandemic to continue. Non-store sales, including online sales, are expected to rise between 7% and 9% compared to last year, reaching a total of $273.7 billion to $278.8 billion, according to the release.
Consumers will be spending on a range of items and experiences, but “the composition of spending from goods to services will also define holiday sales trends,” NRF Chief Economist Jack Kleinhenz said in the release.
“Service spending growth is strong and is growing faster than goods spending,” Kleinhenz said. “The amount of spending on services is back in line with pre-pandemic trends.”
To meet the demands of the holiday season, retailers are expected to hire between 345,000 and 450,000 seasonal workers, per the release. This aligns with the number of seasonal hires made in 2022, which was approximately 391,000. Some of these workers may have been added in October to support the holiday buying events retailers held during that month.
In another holiday spending forecast, Mastercard said in September that it expects a “rebalancing” in consumer spending for the upcoming holiday season. The company said that its SpendingPulse shows retail sales increasing 3.7% for the period between Nov. 1 and Dec. 24.
“While the consumer of holidays past may have been a consumer trying to find footing in a rapidly shifting economy, the consumer of holidays present has taken their power back,” Michelle Meyer, U.S. chief economist, Mastercard Economics Institute, said at the time. “We expect these individuals to impressively navigate the holiday season, making choices and trade-offs that best suit their lifestyles.”