NRF: Holiday sales rise 5%, just miss forecast

Deena Amato-McCoy
SPECS Program Director
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holiday shopping bag with gifts
Retail sales from November 1 through December 31 grew 5.3% over 2021 to $936.3 billion, according to the National Retail Federation.

Retail holiday sales were weaker than industry analysts and experts expected as consumers struggled with inflation and higher interest rates.

Sales in November and December grew 5.3% over 2021 to $936.3 billion,reported the National Retail Federation. The results were below the group’s forecast, which called for growth from  6% to 8%, and between $942.6 billion and $960.4 billion.

The low-end of the NRF forecast was more optimistic than some other holiday forecasts.  Deloitte’s forecast, for example, called for year-over-year holiday sales to increase 4% to 6%.

After a surge of holiday shopping in October amid a slew of deals and promotions from retailers, sales fell 0.6% in December from the previous month and were down 0.5% month-over-month in November. (The NRF’s calculation of retail sales excludes automobile dealers, gasoline stations and restaurants.)

On a more positive note, sales increased 7% year-over-year in 2022 to $4.9 trillion, meeting NRF’s forecast of between 6% and 8% growth.  

“We knew it could be touch-and-go for final holiday sales given early shopping in October that likely pulled some sales forward plus price pressures and cold, stormy weather,” stated NRF chief economist Jack Kleinhenz. 

“The pace of spending was choppy, and consumers may have pulled back more than we had hoped, but these numbers show that they navigated a challenging, inflation-driven environment reasonably well,” he added. “The bottom line is that consumers are still engaged and shopping despite everything happening around them.”

The holiday total includes online and other non-store sales, which were up 9.5% at $261.6 billion. NRF had forecast that the category would grow between 10% and 12% to between $262.8 billion and $267.6 billion.  Online holiday sales were $238.9 billion in 2021.

NRF’s results are based on data from the U.S. Census Bureau, which said that overall retail sales in December – including autos, gas and restaurants – were down 1.1% from November but up 6% year-over-year. In November, sales were down 1% month-over-month in October, but also up 6% year-over-year, according to Census data.

Category Gains

Year-over-year holiday sales rose in all but two of nine retail categories, led by online sales, grocery stores and general merchandise stores.  But sales at electronics and appliances stores fell 5.7%, and sales at furniture and home furnishings stores declined 1.1%

"Although retail foot traffic rose by double-digits in December for practically all categories, it wasn’t enough to counter the effects of inflation combined with deep discounting for the holidays. Inflation was up 6.5% from year-ago levels," said Naveen Jaggi, president, retail advisory services, JLL. "While this is lower than the peaks seen mid-2022, it was enough to dampen consumer confidence heading into holiday shopping. Furthermore, food prices continue to climb, meaning consumers still had to devote more of their dollars to necessities rather than discretionary goods."

Specifics from key sectors for the two months combined, all on an unadjusted year-over-year basis, include:

  • Online and other non-store sales were up 9.5%.
  • Grocery and beverage stores were up 7.8%.
  • General merchandise stores were up 3.8%.
  • Sporting goods stores were up 3.5%.
  • Health and personal care stores were up 2.8%.
  • Clothing and clothing accessory stores were up 2.2%.
  • Building materials and garden supply stores were up 1.5%.
  • Furniture and home furnishings stores were down 1.1%.
  • Electronics and appliance stores were down 5.7%.