Holiday sales this season are set to increase, though at a slower rate than last year.
Total sales between Nov. 1 and Dec. 31 are expected to grow between 6% and 8% compared to 2021, according to data from the National Retail Federation. The growth would represent a total of between $942.6 billion and $960.4 billion in sales, on top of last year’s record-breaking 13.5% growth to $889.3 billion.
While inflation has continued to soar for several months, consumer spending has remained relatively consistent. Compared to 2021, consumer prices rose by 8.2% in September while total retail sales remained flat at $684 billion.
“While consumers are feeling the pressure of inflation and higher prices, and while there is continued stratification with consumer spending and behavior among households at different income levels, consumers remain resilient and continue to engage in commerce,” said NRF president and CEO Matthew Shay in a statement. “In the face of these challenges, many households will supplement spending with savings and credit to provide a cushion and result in a positive holiday season.”
To mitigate the impact of higher prices, consumers are expected to take advantage of broad discounts across the industry in the wake of unusually high inventories. The off-price sector is also expected to benefit.
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Online and non-store sales this holiday season are expected to grow between 10% and 12%, though consumers are largely expected to shift back to in-store shopping this year.
NRF’s projections do not account for the earlier shopping season and the increasing number of consumers who have opted to start their shopping as early as October this year. 46% of holiday shoppers said they planned to browse or shop before November this year, according to a consumer survey from NRF.
When it comes to staffing, NRF predicts a slowdown in the number of seasonal workers hired this year. The group expects between 450,000 and 600,000 seasonal hires this year, compared to 669,800 last year. Various retailers have already announced hiring goals for the holiday season. Some, like Kohl’s, plan to staff for the season similarly to 2021, While others, such as Walmart, are reducing their efforts this year.
Over the last decade, holiday retail sales have averaged an increase of 4.9%.
“The overall outlook is generally positive as consumer fundamentals continue to support economic activity,” said NRF’s chief economist Jack Kleinhenz in a statement. “Despite record levels of inflation, rising interest rates and low levels of confidence, consumers have been steadfast in their spending and remain in the driver’s seat.”
For the full year of 2022, NRF predicts retail sales to grow between 6% and 8% over 2021 to more than $4.86 trillion.
