As the holiday season approaches, both the U.S. economy and consumer confidence remain strong, which is expected to positively influence spending during this time, both in-store and online, according to the National Retail Federation (NRF). The NRF anticipates that holiday spending on gifts, decorations, and experiences will increase by 2.5% to 3.5% compared to the previous year.
From November 1 to December 31, holiday sales are projected to reach between $979.5 billion and $989 billion, up from $955.6 billion in 2023. NRF President and CEO Matthew Shay noted that while consumers may be more cautious, they are still likely to spend.
NRF Chief Economist Jack Kleinhenz added that solid household finances will support this year's holiday shopping. Non-store sales, including online purchases, are predicted to grow by 8% to 9%, bringing total non-store sales to between $295.1 billion and $297.9 billion. This follows a 10.7% rise in non-store sales from 2022 to 2023, which reached $273.3 billion.
However, a shorter shopping period this year, with Thanksgiving falling on November 28, may pose challenges for retailers. With only 26 days from Black Friday to Christmas, retailers will need to manage tight schedules for stocking merchandise, while consumers expect ample inventory in stores.
Shay also pointed out that shoppers are likely to be more price-conscious this season due to concerns about inflation and higher-than-average interest rates, making promotions and value-driven purchases more important.
Seasonal hiring is expected to remain steady, with retailers likely to hire between 400,000 and 500,000 workers, similar to the 509,000 seasonal workers hired in 2023. Additionally, factors such as weather disruptions and the upcoming presidential election could influence holiday sales.
The NRF’s forecast is based on key economic indicators like consumer spending, disposable income, employment, wages, and inflation, while excluding data from restaurants, gas stations, and automobile dealerships to focus solely on core retail sectors.