Monday, November 7, 2022
Total spend in core retail environments will range between $942.6 billion and $960.4 billion, NRF predicted in a Nov. 3, 2022, call with analysts and reporters. The numbers exclude restaurants, gasoline and auto sales.
"This holiday season cycle is anything by typical," said NRF Chief Economist Jack Kleinhenz. "NRF's holiday forecasts take a number of factors into consideration, but the overall outlook is generally positive as consumer fundamentals continue to support economic activity."
The U.S. Labor Department reported the economy added over 260,000 jobs in October and that hourly wages are up 4.7 percent over this time last year. The year-end holiday season is a big deal in retail, accounting for 19 percent of total core retail sales over the past five years, according to NRF.
The NRF's predictions for the holiday shopping season are in line with findings of a consumer survey by the International Council of Shopping Centers. When core retail and restaurant spending are combined, total anticipated spending for the season will reach $1.56 trillion, the ICSC reported.
"Shoppers are continuing to spend despite inflation and economic headwinds, and while higher prices will drive some of the increase in holiday spending this year, overall retailers are poised for a successful holiday season," said Tom McGee, president and CEO of ICSC.
"High prices have holiday shoppers prioritizing their purchases, but there are bright lights throughout the season," said Nick Handrinos, vice chair at Deloitte LLP. Deloitte surveyed both consumers and retailers and found retailers are especially optimistic, with 77 percent expecting holiday sales totals to exceed 2021. Consumers said they expect to spend, on average, $1,455, about the same as average spend was during the 2021 year-end holiday season, Deloitte reported.
All of the predictions—Deloitte, ICSC and NRF—are based on surveys conducted in September.
With pandemic anxieties waning, consumers continue to warm up to the in-store shopping, but aren't ready to forego the conveniences of online shopping. This preference for digital is also driving up interest in social media and advanced technologies for holiday purchases.
Deloitte predicted 35 percent of all holiday shopping will be done in store, which is on par with 2019, the consultancy added. Among "digital native" generations 34 percent plan to use social media for holiday shopping. Three in 10 holiday shoppers told Deloitte that they follow influencers for product recommendations, up from 24 percent in 2021. Better than half (56 percent) plan to use smartphones for their holiday shopping.
The NRF expects online and other non-store sales (which are included in its predicted totals) to grow between 10 and 12 percent, to between $262.8 billion and $267.6 billion of total seasonal spend.
The holiday shopping season got off to an early start, a growing trend in recent years, driven both by inflation and concerns about product availability.
Among consumers surveyed by Deloitte, 38 percent expected the shopping season would begin for them before the end of October. An even larger share of shoppers surveyed for NRF by Prosper Insights & Analytics (46 percent) said they had plans to begin browsing and buying before November.
"Retailers are responding to that demand, as we saw several major scheduled buying events in October," said Kleinhenz. "While this may result in some sales being pulled forward, we expect to see continued deals and promotions throughout the remaining months."
The Deloitte research offers insights into anticipated holiday spend by retail category, and gift cards seem to be gaining prominence, with a 7 percent jump in average expected spend compared to last year, the consultancy reported.
Here's a rundown of retail categories that Deloitte expects will see the most consumer spending:
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