Category: General
Country: United States
By Thomas Lester, November 4, 2022
Washington — While it probably won’t rise at the record rate of last year, the National Retail Federation says big things are in store for retailers this holiday season.
The NRF forecast that holiday retail sales during November and December will grow between 6% and 8% over 2021 to between $942.6 billion and $960.4 billion. Last year’s holiday sales grew 13.5% over 2020 and totaled $889.3 billion, shattering previous records. Holiday retail sales have averaged an increase of 4.9% over the past 10 years, with pandemic spending in recent years accounting for considerable gains.
NRF’s holiday forecast is in line with the organization’s full-year forecast for retail sales, which predicted retail sales will grow between 6% and 8% to more than $4.86 trillion in 2022. Year-to-date, officials noted that 2022 is outpacing 2021 by 7.2%.
This growth, for the year and for the holiday season, comes even as there are numerous economic headwinds, including higher fuel costs, higher housing prices and inflationary concerns.
“We know from what consumers are telling us and behaviors we’re seeing, in the faces of the challenges and uncertainty we’re seeing in the economy, consumers are behaving more cautiously, but they’re continuing to spend on household priorities,” said Matthew Shay, NRF’s president and CEO, in a Nov. 3 conference call outlining the holiday forecast. “We know consumers are looking for deals and discounts in the face of higher energy prices and housing prices. We know they’re looking for those opportunities and we think that will continue into the holiday season.”
On the call, Shay noted that income-based stratification could provide a bit of a drag, particularly among lower-income consumers. “Spending at higher levels continues to be robust, and for consumers in households at slightly lower levels is still durable and resilient. Those lower-income households are feeling the pinch of rising costs on everyday essentials,” he said.
NRF expects that online and other non-store sales, which are included in the total, to increase between 10% and 12% to between $262.8 billion and $267.6 billion. This figure is up from $238.9 billion last year. While e-commerce will remain important, households are also expected to shift back to in-store shopping and a more traditional holiday shopping experience.
While the NRF’s holiday season is counted from Nov. 1 to Dec. 31, many consumers are making holiday purchases earlier.
“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,” said Jack Kleinhenz, NRF’s chief economist. “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.”
Shay noted that 45% of consumers say it’s better to go ahead and get a jump on holiday purchases prior to November. With that said, he believes retail is in position for a robust season. “We’re confident in spite of the early start we’re going to see healthy consumer engagement throughout the rest of this year. Consumers are healthy, and retailers are offering promotions and opportunities in terms of discounts and other opportunities to drive consumer engagement.”
NRF expects retailers will hire between 450,000 and 600,000 seasonal workers. That compares with nearly 670,000 seasonal hires in 2021. Some of this hiring may have been pulled into October as many retailers are eager to supplement their workforces to meet increased consumer demand.
Courtesy: https://hfd.bridgetowermedia.com/acton/ct/41765/s-23ee-2211/Bct/q-005e/l-0019:91ab0/ct7_1/1/lu?sid=TV2%3ATeFip6kGk
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