As the industry moves into the holiday shopping season, the U.S. economy and consumer sentiment are on solid footing, which should have a positive impact on holiday spending both in-store and online, the National Retail Federation (NRF) says.
On Tuesday the trade organization announced that it forecasts spending on holiday gifts, decor, and experiences to grow between 2.5% and 3.5% over last year.
The NRF said it expects 2024 holiday spending (from Nov. 1 through Dec. 31) to total about $979.5 billion to $989 billion, up from $955.6 billion during the same period last year.
“Consumers are a bit more moderated and cautious, but they’re spending,” NRF president and CEO Matthew Shay said on an Oct. 15 media conference call.
NRF chief economist Jack Kleinhenz told reporters: “Household finances are in good shape, and that will support holiday spending.”
Online and other non-store sales are expected to increase 8% or 9%, to a total of between $295.1 billion and $297.9 billion, Shay said. In 2023, non-store sales rose 10.7% from the previous year, to $273.3 billion.
An important factor in the 2024 holiday season will be the shorter shopping period, because Thanksgiving occurs late this year. It falls on Nov. 28, leaving only 26 shopping days from Black Friday, the day after Thanksgiving—considered the unofficial kickoff of the holiday season—to Dec. 25.
That time frame may be challenging for retailers, Shay said, since consumers have expectations that the goods they want will be in store in plentiful amounts, but retailers have a tighter schedule for ordering and receiving merchandise.
Shay also said consumers are likely to be more price-conscious this holiday shopping season, given their perceptions about higher-than-average interest rates and inflation. Shoppers will want promotions and value in their purchases.
The NRF says seasonal hiring likely will be about the same as 2023, as many retailers are already well-staffed in the months before the holidays. It predicts that retailers will hire between 400,000 and 500,000 seasonal workers in 2024, compared with 509,000 seasonal hires last year.
Weather and the presidential election could also have an impact on the holiday shopping season, according to the NRF. The two hurricanes, Helene and Milton, that hit the Southeast since late September have disrupted some businesses in the affected area.
NRF’s holiday forecast is based on key economic indicators such as consumer spending, disposable personal income, employment, wages, inflation, and previous monthly retail sales. The NRF report excludes restaurants, gas stations, and automobile dealers, to focus on core retail.
(Photo courtesy of Getty Images)
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