The National Retail Federation (NRF) has released its holiday sales forecast for 2024, projecting steady growth for the winter season.
According to the NRF, retail spending for November and December is expected to rise by 2.5% to 3.5% over last year’s figures, reaching between $979.5 billion and $989 billion. This forecast follows $955.6 billion in sales reported during the same period in 2023.
Economic Conditions Behind Spending Increases
NRF President and CEO Matthew Shay indicated that a stable economy is supporting the growth expectations. He noted factors such as a solid labor market and higher wages as contributors to ongoing consumer spending. These conditions are expected to keep retail sales on track through the end of the year.
The NRF’s holiday sales forecast is in line with its annual outlook for 2024, which also predicts growth of 2.5% to 3.5% over 2023. This rate is lower than the previous year’s 5.4% increase over 2022, pointing to more cautious consumer spending due to economic uncertainties.
Online Sales Expected to Drive Growth
A notable share of the projected increase in sales is expected to come from online and non-store sales, forecasted to grow by 8% to 9%. This would bring online holiday sales to an estimated $295.1 billion to $297.9 billion, up from $273.3 billion last year. This growth is slower than the 10.7% rise reported in 2023, suggesting more selective spending by consumers.
NRF Chief Economist Jack Kleinhenz mentioned that while household finances remain in good shape, consumers are expected to be more measured in their spending. Despite this, the NRF anticipates economic growth to continue at a steady pace in the latter half of 2024.
Adjustments Needed for Shorter Holiday Season
This year’s holiday shopping period is five days shorter, totaling 26 days between Thanksgiving and Christmas. Retailers may need to adjust their strategies to accommodate the compressed schedule, possibly by increasing early promotions.
Seasonal hiring projections indicate that retailers will hire between 400,000 and 500,000 temporary workers to manage holiday demand, slightly fewer than the 509,000 hired last year. This change could reflect shifts in staffing strategies or consumer buying patterns.
Other factors that could influence holiday spending include recent hurricanes affecting local economies. Additionally, while the U.S. presidential election takes place during the season, its impact on retail sales is uncertain.
