Holiday Spending Will be Up...But There Could be Some Coal in the Stocking

Remember when the Christmas shopping season officially kicked off on Thanksgiving Weekend with the archaic and ridiculously named Black Friday feeding frenzy? That’s a quaint concept now when the season has been pulled forward weeks and even months into the fall – and even earlier.

So the art of holiday business forecasting has had to adapt to the realities of the marketplace and try to understand the dynamics of the changing shopping patterns. One of the highly regarded forecasters has been the National Retail Federation, the trade association that represents retailing companies across the country. They recently issued their forecast and here are the highlights:

• Holiday spending will increase between 2.5 percent and 3.5 percent over 2023, to $979.5 billion to $989 billion in total holiday spending in November and December. That compares with $955.6 billion during the same timeframe last year.  
• Consumers will spend on average $902 per person during the season, up about $25 from last year and $16 above the highest level, recorded in 2019. These figures exclude inflation.
• Gifts will account for about two-thirds of that total, the rest being holiday decorations, cards, candy and food. The vast majority of that will be gifts for family, the rest for friends, co-workers and others.
• About 45 percent of consumers have begun the shopping process before November, either making a purchase or at least browsing. Still, almost two-thirds of shoppers don’t expect to finish holiday buying until well into December. Early shopping is driven by consumers managing their budgets and the desire to avoid last-minute crowds and shopping stress.
• Gift cards are the number one most requested holiday present, consumers told the NRF, followed by clothing and accessories, books and media and personal care and beauty products. Home furnishings was well down the list.
• More than half of all shoppers – 58 percent – said they would turn to online for their buying, followed by department stores, grocery stores and discount stores. Only about a quarter of shoppers said they planned to go to small businesses. These numbers are within a point or two of last year’s projections.
• The biggest concern from the NRF was the truncated period between Thanksgiving and Christmas this year, five days shorter than last year. The recent hurricanes in the Southeast and the unknowns surrounding the presidential election this year particularly if it’s not decided quickly also might impact holiday shopping, the organization cautioned.