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NRF predicts ‘healthy’ holiday sales as growth slows amid inflation

Many consumers are still financially better off today than they were in 2019 due to all the stimulus efforts.
Holiday spending is expected to total between $942.6 billion and $960.4 billion this year, according to the NRF.

This year’s holiday sales will be solid, but their growth won’t be anywhere near last year.

Holiday sales during November and December will increase between 6% and 8% from 2021, predicted the National Retail Federation. By contrast, last year’s holiday sales were up 13.5% from 2020.  (The NRF excludes spending at automobile dealers, gasoline stations and restaurants from its calculations.)

Holiday retail sales have averaged an increase of 4.9% during the past 10 years. But pandemic spending in recent years has accounted for considerable gains.

The NRF forecast is mostly in line with earlier holiday forecasts. Deloitte’s forecast calls for year-over-year holiday sales to increase 4% to 6%. AlixPartners forecasts that holiday sales will be up 4% to 7% from last year.

Holiday spending is expected to total between $942.6 billion and $960.4 billion, which would top last year’s record $889.3 billion, according to the NRF.  The majority  of the expected sales increase will be driven by higher prices.

NRF expects that online and other non-store sales, which are included in the total, to increase 10% to 12%, to between $262.8 billion and $267.6 billion, up from $238.9 billion last year. While e-commerce will remain important, households are also expected to shift back to in-store shopping and a more traditional holiday shopping experience.

An earlier study by NRF found that consumers plan to spend $832.84 on average on gifts and holiday items such as decorations and food, this year, which is in line with the average for the last 10 years.

Noting that this year’s holiday season cycle “is anything but typical,” NRF chief economist Jack Kleinhenz said that the overall outlook is generally positive as consumer fundamentals continue to support economic activity.

“Despite record levels of inflation, rising interest rates and low levels of confidence, consumers have been steadfast in their spending and remain in the driver’s seat,” he added.

Kleinhenz said the holiday shopping season kicked off earlier this year as shoppers are concerned about inflation and availability of products.

“Retailers are responding to that demand, as we saw several major scheduled buying events in October,” hje said. “While this may result in some sales being pulled forward, we expect to see continued deals and promotions throughout the remaining months.”

Kleinhenz’ comments mirror NRF’s consumer data, which shows that consumers have been kicking off their holiday shopping early over the last decade in order to spread out their budgets and avoid the stress of holiday shopping.  

This year, given concerns around inflation, 46% of holiday shoppers said they planned to browse or buy before November, according to NRF’s annual survey conducted by Prosper Insights & Analytics.


NRF expects retailers will hire between 450,000 and 600,000 seasonal workers, compared with 669,800 seasonal hires in 2021.

[Read More: Walmart to hire 40,000 employees for holiday season — and beyond]

Some of this hiring may have been pulled into October as many retailers were eager to supplement their workforces to meet increased consumer demand, the NRF said.

Weather Outlook

Weather, as always, plays a role in holiday retail sales. The National Oceanic and Atmospheric Administration is forecasting warmer-than-average temperatures for the Southwest, Gulf Coast and Eastern Seaboard, which cover a large swath of the U.S. population. Wetter and snowier conditions are expected for parts of the northern tier. 

NRF’s holiday forecast is in line with the group’s full-year forecast for retail sales, which predicted retail sales will grow between 6% and 8% to more than $4.86 trillion in 2022.  

NRF's holiday forecast is based on economic modeling that considers a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit, previous retail sales and weather.

Additional holiday information is available on NRF’s Winter Holidays web page.


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