Retail predictions for Halloween and Christmas

An industry group has released its predictions for retail spending through the upcoming holiday season.

The National Retail Federation (NRF) is predicting a steady growth in sales through November and December. It defines the holiday season as Nov. 1 through Dec. 31, six days shorter than the 2023 holiday period.

ABD sat in on a virtual briefing NRF provided for reporters on Tuesday. It included NRF President and CEO, Matthew Shay, and NRF Chief Economist, Jack Kleinhenz.

NRF predicts winter holiday spending will increase between 2.5% and 3.5% over last year. That translates to between $979.5 billion and $989 billion in total holiday spending. During November and December 2023, that was $955.6 billion.

Shay said the overall economy has been good in 2024 and the retail industry is benefiting from that strength.

“We know going into the holiday season that consumers continue to show resilience, and they show strength in their spending and their prioritization of devoting portions of their monthly income to household needs and priorities as they’ve continued to power the economy for the last four and a half years,” he said. “Consumer spending, we know makes up approximately 70% of our economic activity in the U.S. It has been stable, and we’ve been in a long period of economic expansion since the pandemic four and a half years ago.”

Kleinhenz echoed Shay‘s analysis that the country’s overall economic health is strong, pointing to decreases in inflation and the Federal Reserve lowering interest rates.

“As we look forward into the remainder of the year, I’m looking at GDP growth on average to be a little bit above a 2% annualized growth,” he said, adding, “In terms of consumer spending, the trend has been rather stable, often characterized as resilient. I would say a better adjective might be persistent. And we’ve seen consumers continually support the overall economy throughout most of this year.”

In addition to sales predictions, the NRF briefing included the impact sales will have on the number of seasonal employees retail outlets expect to hire this year. Shay anticipates stores will add between 400,000 and 500,000 seasonal workers, similar to hiring practices in 2023.

“Retailers are well staffed now, and they’ve been adding workers, and so in some ways, we don’t see the same kind of spike that we have seen historically,” he explained. “Retail employment has grown. Overall employment has grown. The size of the workforce has grown in the last five years. The impact of seasonal hires has been somewhat flat. A lot of that has to do with the fact that when you’ve got a fully staffed operation, you don’t need as many as you once did.”

One category of spending that is expected to be particularly robust is online and other non-store sales. It is expected to total between $295.1 billion and $297.9 billion. That’s an increase of as much as 9% over 2023.

“We ask ourselves every year why we continue to break out e-commerce. Because we do live in a world in which we have these seamless experiences across all channels and all segments,” said Shay. “And consumers seem to be increasingly agnostic as to the way in which they get the goods, what they want, where they want, how they want it, at the price, at which they want it.”

NRF also believes another factor driving sales this year is the number of major retailers who have recently lowered prices on thousands of items.

“I think there’s definitely been price deceleration in retail,” said Kleinhenz. “That’s going to be important going forward. It gives a little bit more money in the people’s wallets and in terms of promotions and discounts, it’s just part of the holiday strategy that we’ve been seeing for the last few years, and we’ve already seen it earlier in October, with some of the big merchandisers having their special day.

In an earlier news release, NRF reported Halloween shopping is on the rise. Forty seven percent of those surveyed had started Halloween shopping prior to October. That compares to 37% in 2023.

“Halloween marks the official transition to the fall season for many Americans, and consumers are eager to get a jump start on purchasing new seasonal décor and other autumnal items,” NRF Vice President of Industry and Consumer Insights, Katherine Cullen was quoted in the release. “Retailers are prepared to meet this early demand by offering shoppers all the holiday essentials to make this year’s celebrations memorable.”

Although more consumers are shopping, anticipated spending for Halloween 2024 will be slightly lower at $11.6 billion, with consumers expected to spend $108.63 each. Last year, it was a record-setting $12.2 billion in individual spending of $108.24.

Shay and Kleinhenz said it was too early to predict the impact Hurricanes Helene and Milton will have on consumer spending. In some areas, retailers have been able to reopen, but those in smaller communities suffering a greater loss have not.

“Certainly, consumers and households that are in the affected area will be certainly focusing on spending for repairs and damages, especially for clothing, electronics and home furnishings, rather than on non-necessity,” Kleinhenz said. “But it’s really too early to know the full impact on retail. It’s just hard to measure at this point, certainly because many retailers were forced to close because of mandatory evacuation.”

For more information, visit NRF’s Winter Holiday FAQ: https://nrf.com/research-insights/holiday-data-and-trends/winter-holidays/winter-holiday-faqs.

For the Winter Holiday Headquarters, click: https://nrf.com/research-insights/holiday-data-and-trends/winter-holidays.

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