NRF, ICSC both predict solid increase in holiday sales to rise 3.6%

Two major retail organizations delivered some early holiday cheer to retailers.



The National Retail Federation and the International Council of Shopping Centers issued their annual holiday forecasts on Tuesday, and both predicted holiday shoppers will spend more this year than they did last year.



According to the NRF’s annual holiday forecast, holiday sales (November and December, and excludes autos, gas and restaurant sales) will increase 3.6% to $655.8 billion in 2016. The increase is significantly higher than the 10-year average of 2.5%, and above the seven-year average of 3.4% since the economic recovery began in 2009, the NRF said. Holiday sales in 2015 increased 3.0% over the previous year.



Additionally, NRF forecasts non-store sales (includes online, direct-to-consumer and kiosk sales) to increase between 7% and 10% to as much as $117 billion.



The ICSC forecast predicts 3.3% year-over-year growth sales at physical stores this holiday season. Including online sales for physical retailers, ICSC predicts sales will rise 3.5%.



“Consumers have seen steady job and income gains throughout the year, resulting in continued confidence and the greater use of credit, which bodes well for more spending throughout the holiday season,” NRF chief economist Jack Kleinhenz said.



He added a note of caution, saying that that increased geopolitical uncertainty, the presidential election outcome and unseasonably warm weather are the main issues still at play with the greatest potential to shake consumer confidence and impact shopping patterns.



“However, the economic spending power of the consumer is resilient and it should never be underestimated,” continued Kleinhenz.



NRF’s holiday sales forecast is based on an economic model that factors in several indicators including, consumer credit, disposable personal income and previous monthly retail sales releases.



The NRF forecast is more or less in line with other industry forecasts from Deloitte, and AlixPartners and the International Council of Shopping Centers.