2023 holiday season in US to reach record spending levels: NRF

November 2, 2023

The National Retail Federation is quite bullish on U.S. consumer spend this holiday season, regardless of geopolitical events or overall economic trends. Image: National Retail Federation

By Staff reports

While not entirely a bellwether of exclusive luxury spending by the U.S. shopper, a new survey claims that this coming holiday season will reach record spending levels in the United States – itself an indication of consumer confidence in the world’s largest economy.

The National Retail Federation forecast that holiday spending is expected to reach record levels during November and December and will grow between 3 percent and 4 percent over 2022 to between $957.3 billion and $966.6 billion.

“It is not surprising to see holiday sales growth returning to pre-pandemic levels,” NRF president/CEO Matthew Shay said in a statement from Washington, DC. “Overall household finances remain in good shape and will continue to support the consumer’s ability to spend.”

NRF is the largest retail trade organization in the U.S.

Top 10 2023 holiday shopping destinations. Source: NRF and Prosper Insights & Analytics October 2023 Consumer Holiday Survey

Consumers driven
Despite a slower growth rate compared with the past three years, when trillions of dollars of stimulus led to unprecedented rates of retail spending during the pandemic, this year’s holiday spending is consistent with the average annual holiday increase of 3.6 percent from 2010 to 2019, per NRF.

Online shopping has been one of the biggest shifts in consumer behavior from the COVID-19 pandemic.

Online and other non-store sales, which are included in the total, are expected to increase between 7 percent and 9 percent to a total of between $273.7 billion and $278.8 billion, per NRF. That figure is up from $255.8 billion last year.

“Consumers remain in the driver’s seat, and are resilient despite headwinds of inflation, higher gas prices, stringent credit conditions and elevated interest rates,” NRF chief economist Jack Kleinhenz said in the statement.

“We expect spending to continue through the end of the year on a range of items and experiences, but at a slower pace,” he said. “Solid job and wage growth will be contributing factors this holiday season, and consumers will be looking for deals and discounts to stretch their dollars.”

Consumer holiday spending plans. Source: NRF and Prosper Insights & Analytics October 2023 Consumer Holiday Survey

Hire power
To meet the demand of the holiday season, NRF expects retailers will hire between 345,000 and 450,000 seasonal workers, in line with 391,000 seasonal hires in 2022.

Some of this hiring may have been pulled into October to support retailers’ holiday buying events in October, the organization said.

That said, despite months of preparation for the holiday season, retailers could sustain unpredictable impacts from weather in the U.S.

This year, holiday retail spending may experience residual effects from El Niño, depending on the strength and persistence of the weather phenomena.

NRF's holiday forecast is based on economic modeling that considers a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit and previous retail sales.

NRF’s calculation excludes automobile dealers, gasoline stations and restaurants to focus on core retail. NRF defines the holiday season as Nov. 1 through Dec. 31.

NRF’S LATEST HOLIDAY SURVEY conducted by Prosper Insights & Analytics, which is separate from the holiday sales forecast, shows 43 percent of holiday shoppers planned to start making purchases before November.

The survey also found consumers plan to spend $875 on core holiday items including gifts, decorations, food and other holiday-related purchases this year.

“For all that the consumer has kept the economy afloat, the composition of spending from goods to services will also define holiday sales trends,” Mr. Kleinhenz said in the statement.

“Service spending growth is strong and is growing faster than goods spending.,” he said. “The amount of spending on services is back in line with pre-pandemic trends.”

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2023 holiday season in US to reach record spending levels: NRF

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