US: holiday shopping season set to break records

Article originally posted on HERE on November 18, 2024

The 2024 holiday shopping season is poised for unprecedented activity, with the National Retail Federation (NRF) estimating a record 183.4m shoppers across both online and in-store platforms from Thanksgiving Day to Cyber Monday.

This reflects a surge in consumer enthusiasm for seasonal deals and traditions.

Matthew Shay, NRF President and CEO, highlighted the underlying strength of the economy in fostering this shopping momentum. “The economy remains fundamentally healthy and continues to maintain its momentum heading into the final months of the year,” Shay noted.

He emphasised that a robust job market and wage growth are underpinning consumer confidence.

Holiday spending hits new high

Consumer spending during the winter holidays is forecast to reach a record $902 per person on average, encompassing gifts, decorations, food, and other festive items.

This trend aligns with the NRF’s broader forecast of total holiday spending, which is expected to grow between 2.5% and 3.5% over 2023 levels. This equates to an estimated $979.5bn to $989bn in sales during November and December, a marked increase from last year’s $955.6bn.

“Household finances are in good shape, providing an impetus for strong spending heading into the holiday season,” commented Jack Kleinhenz, NRF Chief Economist.

However, he cautioned that shoppers may exercise more caution this year, reflecting a blend of optimism and prudence in spending habits.

Online sales lead the charge

Online and non-store sales are projected to see the most significant growth, with an anticipated increase of 8% to 9%, bringing total sales in this category to between $295.1bn and $297.9bn. This builds on the 10.7% growth seen in 2023, indicating a sustained shift in consumer shopping preferences.

Retailers are gearing up to meet this heightened demand by hiring between 400,000 and 500,000 seasonal workers. Although this is slightly lower than last year’s 509,000 hires, the trend reflects evolving retail strategies, including a stronger focus on October sales events to capture early holiday demand.

Challenges on the horizon

Despite the promising outlook, this year’s shorter holiday season—spanning just 26 days between Thanksgiving and Christmas—could present logistical challenges for both retailers and shoppers.

External factors, such as the economic repercussions of Hurricanes Helene and Milton, also add a layer of complexity to this year’s forecast.

As the NRF continues to monitor key economic indicators such as employment, wages, and inflation, Shay remains optimistic about the season’s potential. “The winter holidays are an important tradition to American families, and their capacity to spend will continue to reflect this,” he concluded.