U.S. Census data affirms NRF retail forecast

Official numbers provided Jan. 17, 2024, by the U.S. Census Bureau affirm bullish predictions by retail industry leaders and trade associations of record-breaking 2023 holiday spending. The report, released one day after the National Retail Federation's annual conference and expo, indicates a 3.8 percent increase over 2022's holiday spend.

According to NRF Chief Economist Jack Kleinhenz, this shows pre-pandemic shopping levels have returned, despite ongoing economic concerns.

"Consumer spending was remarkably resilient throughout 2023 and finished the year with a solid pace for the holiday season," he said. "Although inflation has been the biggest concern for households, the price of goods eased notably and was helped by a healthy labor market, underscoring a successful holiday season for retailers."

Kleinhenz further noted that 2023 holiday sales topped last year's $929.5 billion, supporting the NRF's prediction of a 3- to 4-percent uplift in 2023 holiday sales, which NRF researchers expected to total between $957.3 billion and $966.6 billion. These numbers demonstrate shoppers are maintaining an average year-over-year increase of around 3.6 percent, which the retail industry recorded between 2010 and 2019, he added.

Commerce up, seasonal jobs down

NRF representatives pointed out that the 2023 holiday spending forecast focused on core retail sales from November to December, excluding automotive and restaurant categories, noting digital commerce growth was particularly strong. The U.S. Census Bureau data shows NRF-defined categories totaled $276.8 billion in online and non-store sales, consistent with NRF predictions of between $273.7 and $278.8 billion.

U.S. Census totals show strong performance in all but two of nine major retail categories, exceptions being building materials/garden supplies and furniture/home goods, which dropped by 3.9 percent and 6.2 percent, respectively. Top-performing categories included the following:

• Electronics and appliance stores were up 9.3 percent
• Health and personal care stores were up 9 percent
• Online and other non-store sales were up 8.2 percent
• Clothing and clothing accessory stores were up 3 percent
• General merchandise stores were up 2 percent
• Grocery and beverage stores were up 1.1 percent
• Sporting goods stores were up 0.3 percent

The NRF further indicated that holiday jobs totaled 439,500 for November and December, statistics consistent with NRF expectations of between 345,000 and 450,000 seasonal workers, compared to 391,000 seasonal hires in 2022.

Rising industry dynamism

NRF CEO Matthew Shay shared additional thoughts with Bill Thorne, the NRF's senior vice president of communications and public affairs, in an Jan. 16, 2024, interview broadcast during NRF 2024, which took place from Jan. 14 through 16.

"For all the talk of consumer sentiment, I think the things that really drive consumer spending are the unemployment rate and wage growth," he said. "And right now, the unemployment rate is very low. Wage growth remains steady, although it's moderated a bit, but it's still running in excess of inflation, and consumers vote based on whether or not they have jobs, whether or not they're making money."

Looking ahead, Shay said he expects consumers to continue to seek value and monitor spending, and retailers that execute at a high level and keep up with the "dynamism in the industry" will be successful.

A transcript of the interview is available at nrf.com/blog/state-retail-heading-2024

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