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Dive Brief:
- Signaling the impact of the current economic climate, the National Retail Federation predicts that holiday spending during November and December will rise to “record levels” of between 3% and 4% year over year to between $957.3 billion and $966.6 billion.
- The NRF projects that online and non-store sales will rise between 7% and 9% to between $273.7 billion and $278.8 billion, according to the announcement.
- Retailers are expected to hire between 345,000 and 450,000 seasonal workers this year, up from 391,000 seasonal employees last year, per the NRF’s analysis.
Dive Insight:
Though holiday sales are expected to grow this year, that growth is more modest than last year. In 2022, the NRF predicted that retail sales in November and December would rise between 6% and 8%, down from the 2021 seasonal sales increase of 13.5%.
“Consumers remain in the driver’s seat, and are resilient despite headwinds of inflation, higher gas prices, stringent credit conditions and elevated interest rates,” NRF Chief Economist Jack Kleinhenz said in a statement. “We expect spending to continue through the end of the year on a range of items and experiences, but at a slower pace. Solid job and wage growth will be contributing factors this holiday season, and consumers will be looking for deals and discounts to stretch their dollars.”
The NRF’s research builds upon other reports indicating that some consumers are pulling back on their spending this year. Echoing the NRF, a September report from Deloitte estimated that holiday retail sales from November to January would see a modest increase between 3.5% and 4.6% this year, pushing sales between $1.54 trillion and $1.56 trillion.
The following month, Deloitte released another report predicting that holiday shopping budgets would rise 14% year over year, but that increase would vary depending on consumer salaries. Shoppers earning between $100,000 and $199,000 plan to spend only 2% more this year, and shoppers with incomes below $50,000 plan to increase their budgets by 11% year over year, Deloitte found. Consumers earning between $50,000 and $99,000 expect a 26% increase in their holiday spending.
The NRF’s research further contextualizes the retail sector’s seasonal hiring trend. Challenger, Gray & Christmas released a report this month indicating that retailers cut more than 72,000 jobs through October, marking the most significant workforce reduction in the sector since October 2020. The only other industry eliminating more jobs than retail is the technology industry at 158,513 positions, according to the report.
As some retailers prepare to hire more seasonal employees, the industry’s inventory problems appear to have stabilized. NRF CEO Matthew Shay said in late October that retailers’ inventory-to-sales ratios have returned to pre-pandemic levels.
via https://www.aiupnow.com
Tatiana Walk-Morris, Khareem Sudlow
