Industry / Trends

National Retail Federation Predicts Drop in Holiday Sales Growth


The National Retail Federation’s much-anticipated holiday sales forecast is cooler than last year’s results, showing the pressures U.S. households are under because of higher-than-usual interest rates and gas prices, credit card and student loan debt, and geopolitical issues.

“Our sense is that the cumulative effect of all of these things is going to show some moderation in consumer behavior relative to the last several years of holiday spending,” NRF president and CEO Matthew Shay said on a media call today. “That is something that is predictable and ultimately unescapable.”

The Washington, D.C., trade organization said it expected holiday spending to rise 3% or 4%, to between $957.3 billion and $966.6 billion. Last year, holiday sales growth was 5.4%, according to the NRF.

“[Consumers} will be looking for deals and discounts, looking for ways to make the most of the monthly paychecks they’re bringing home,” Shay said. He compared 2023 to pre-pandemic holiday sales, which increased around 3.6% annually from 2010 to 2019. Last year’s consumer spending during the holiday season (Nov. 1 through Dec. 31) totaled $930 billion, Shay said.

In addition to their financial constraints, consumers may be concerned about a U.S. government shutdown, Shay said, and extreme weather could have an impact on shopping behavior, too. On the plus side, steady job and wage growth should benefit holiday spending, he said.

Shay told reporters that overall retail sales have grown year over year for 41 consecutive months. For the first nine months of 2023, consumer spending was up 3.7% compared with the same period in 2022. Pre-pandemic, retail sales were growing 3.6% annually, Shay said.

Online and other non-store sales during the holiday season are expected to increase between 7% and 9%, from $255.8 billion last year to $273.7 billion–$278.8 billion this year, Shay said. The NRF also reported that it expects retailers to hire between 345,000 and 450,000 seasonal workers this year, in line with the 391,000 seasonal hires of 2022.

According to the group’s latest holiday survey—which is separate from the holiday sales forecast—43% of shoppers planned to make holiday purchases before November. The survey, conducted by Prosper Insights & Analytics, also found that per-person spending on core holiday items, including gifts, decorations, and food, would average about $875 this year.

Some jewelry retailers have released their holiday gift guides and Advent calendars, and already announced deadlines for placing custom orders and Black Friday, Cyber Monday, and other special sales. For example, Mejuri said it will hold its biggest sale of the year, offering 20% off purchases of $150 or more Nov. 13–19 for its app and website members. Its public sale will run Nov. 20–28.

Top: Holiday shopping in 2023 will be affected by economic pressures, according to the National Retail Federation’s forecast released on Nov. 2. (Photo via Getty Images)

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Karen Dybis

By: Karen Dybis

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