The National Retail Federation is projecting U.S. holiday sales in November and December to crest the $1 trillion mark for the first time ever.
According to the NRF's holiday forecast released on October 15, consumer spending is expected to grow by 4.2% year-over-year this holiday season. The group credits the increase to a resilient consumer base, which has continued to prioritize holiday spending even as budgets have tightened.
"We head into the holiday season with strong spending momentum, as consumers remain the bright spot in the economy,” NRF chief economist Mark Mathews said.
However, inflation is expected to play a substantial role in this year's record holiday sales numbers, with Bain & Company noting that higher prices will likely account for much of that growth. In a September analysis, Bain predicted that holiday sales growth for home furnishings, books, music, sporting goods, building and garden, health and personal care, and food and beverage will be driven entirely by inflation, with a decline in overall units purchased by consumers. At the same time, general merchandise, clothing, and e-commerce sales numbers will be fueled by a combination of inflated prices and growth in units bought.
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Separately, a survey from market research firm Circana of 3,534 U.S. consumers found that nearly three-quarters of respondents plan to be more budget conscious this year, by focusing more on promotional items and special sales, and scaling back in discretionary categories.
“Consumers are not abandoning holiday spending, they’re becoming increasingly purposeful about where and how they spend,” Circana head of global thought leadership, Kiara Barrett, said in an October 8 release.
