Record-breaking holiday spending expected

The just-wrapped-up five-day holiday shopping kickoff over Thanksgiving shows promise for the rest of the period.

The National Retail Federation (NRF) reported an estimated 197 million shoppers participated in the traditional start of the holiday shopping season. That surpasses the prediction of 183.4 million shoppers. The full holiday shopping season is Nov. 1 through Dec. 31.

The findings were in a survey conducted for NRF by Prosper Insights and Analytics. ABD joined a virtual briefing NRF and Prosper Insights organized for news reporters.

“Thanksgiving is a single five-day shopping period throughout those two months of the holiday season, but it’s a very important five-day period. It’s a very important holiday weekend,” said Matthew Shay, President and CEO of NRF. “That’s an emotional time, and it’s usually a very good indicator of the overall health of the consumer in the economy. While maybe no longer determined to be the literal beginning of the holiday shopping season, it’s certainly the emotional kickoff, and even more important to consumers than it was before the pandemic.”

Shay added consumers have become more thoughtful in their spending patterns but continue to spend on household needs.

“And the capacity to spend has been underpinned by a healthy jobs market and wage growth generally outpacing inflation,” he said. “On the good side, we know inflation is flat and negative, even for food, and consumers are in a good position for spending on the good side. For perspective, retail sales have grown year over year every month since May 2020. Consumer spending on major holidays and back to school have reached near record levels, even as consumers are adjusting the spending in other areas, where inflation continues to linger.”

Breaking down the numbers between shopping in-store or online, the survey found 126 million consumers opted to visit brick-and-mortar stores. That is up from 121.4 million last year.

It is a different story for online shopping. Last year, 134.2 consumers shopped online with laptops, desktops, or smartphones. That number dropped to 124.3 this year.

“I think, since the pandemic, individuals, people, families, friends, really missed the opportunity to be together, socializing, creating an experience during the several years of the pandemic,” said Shay. “And that is why these numbers have come back so strongly, back in line with great deals. People really are out there shopping, and so the in-store traffic was very good.”

Shopping destinations crossed all genres of retail, said Phil Rist, Prosper’s Executive Vice President of Strategy.

“The most popular items were clothing and accessories bought by 49% of those surveyed, toys at 31%, gift cards at 27%, food and candy at 23%, and personal care and beauty items also 23%,” he explained. “The most popular shopping destinations included department stores at 42%, online also at 42%, grocery stores and supermarkets at 40%, clothing and accessory stores 37% and discount stores 32%. Consumers indicated that their purchases were specifically driven by sales and promotion, and many said that free shipping helped convince them to make a purchase that they were hesitant about.”

“Take away from all of this is we’ve seen and expect a very healthy holiday season. Consumers are spending. Retailers are feeling positive this holiday season,” said Shay.

Overall, NRF predicts holiday spending will reach between $979.5 and $989 billion this year. That would be as much as 3.5% over last year.

Read more about the findings at https://nrf.com/research-insights/holiday-data-and-trends/winter-holidays

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