NRF: Holiday Spending Could Top $966B, but Shift from Goods to Services Continues

The National Retail Federation (NRF) is predicting robust holiday sales, with U.S. spending forecast to climb 3%-4% over 2022, generating between $957.3 billion to $966.6 billion. While the 2023 growth rate is lower than in recent years, when stimulus spending helped inflate retail sales, it’s in line with the average annual holiday increase of 3.6% seen from 2010 to 2019.

“It is not surprising to see holiday sales growth returning to pre-pandemic levels,” said Matthew Shay, President and CEO of the NRF in a statement. “Overall household finances remain in good shape and will continue to support the consumer’s ability to spend.”

The NRF’s forecast, which is based on economic modeling that takes multiple factors into account, is in line with the Mastercard Spending Pulse prediction from September 2023 that U.S. retail sales will climb 3.7% for the Nov. 1 to Dec. 24, 2023 period.

Ecommerce sales — which already were growing more quickly than brick-and-mortar sales before COVID-19 gave them an additional boost — are projected to increase 7%-9% this holiday season, which the NRF defines as Nov. 1 to Dec. 31. Online holiday sales are forecast to range from $273.7 billion to $278.8 billion, up from the $255.8 billion spent in the 2022 holiday season.

Adobe is forecasting more modest growth for ecommerce sales during this period, predicting they will total $221.8 billion, up 4.8% from the $211.7 billion the company said U.S. consumers spent online during holiday 2022. Adobe’s forecast is based on Adobe Analytics data that tracks more than 1 trillion visits to U.S. websites.

“For all that the consumer has kept the economy afloat, the composition of spending from goods to services will also define holiday sales trends,” said Jack Kleinhenz, Chief Economist at the NRF in a statement. “Service spending growth is strong and is growing faster than goods spending. The amount of spending on services is back in line with pre-pandemic trends.”

NRF is predicting that retailers will hire 345,000 to 450,000 seasonal workers, a forecast in line with the 391,000 employees brought on in 2022. Some of this hiring may have taken place in October to support early holiday sales events and promotions.