Washington — Holiday spending is expected to be healthy even with recent inflationary challenges, according to the National Retail Federation (NRF) 2022 forecast, which notes holiday retail sales during November and December will grow between 6 percent and 8 percent from 2021 levels. This will result in sales of between $942.6 billion and $960.4 billion.
In 2021, holiday sales grew 13.5 percent from 2020 levels and totaled $889.3 billion, breaking previous records. Holiday retail sales have averaged an increase of 4.9 percent during the past 10 years, with pandemic spending in recent years accounting for considerable gains.
“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,” NRF President and CEO Matthew Shay says. “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.”
NRF expects online and other non-store sales, which are included in the total, to increase between 10 and 12 percent to between $262.8 billion and $267.6 billion. This figure is up from $238.9 billion last year. While ecommerce will remain important, NRF notes households are also expected to shift back to in-store shopping and a more traditional holiday shopping experience.
“This holiday season cycle is anything but typical,” NRF Chief Economist Jack Kleinhenz says. “NRF’s holiday forecast takes a number of factors into consideration, but the overall outlook is generally positive as consumer fundamentals continue to support economic activity. 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.”
“The holiday shopping season kicked off earlier this year — a growing trend in recent years — as shoppers are concerned about inflation and availability of products,” Kleinhenz says. “Retailers are responding to that demand, as we saw several major scheduled buying events in October. While this may result in some sales being pulled forward, we expect to see continued deals and promotions throughout the remaining months.”
Kleinhenz’ comments mirror NRF’s consumer data, which shows that consumers have been kicking off their holiday shopping early during the past decade to spread out their budgets and avoid the stress of holiday shopping. This year, given concerns around inflation, 46 percent of holiday shoppers said they plan to browse or buy before November, according to NRF’s annual survey conducted by Prosper Insights & Analytics. Still, consumers plan to spend $832.84 on average on gifts and holiday items such as decorations and food, in line with the average for the past 10 years.
NRF also expects retailers to hire between 450,000 and 600,000 seasonal workers. That compares with 669,800 seasonal hires in 2021. Some of this hiring might have been pulled into October as many retailers are eager to supplement their workforces to meet increased consumer demand.
While retailers face a multitude of challenges, NRF says one is totally out of their hands. Weather, as always, plays a role in holiday retail sales. The National Oceanic and Atmospheric Administration is forecasting warmer-than-average temperatures for the Southwest, Gulf Coast and Eastern Seaboard, but wetter and snowier conditions are expected for parts of the northern tier.