Surveys

Holiday Sales to See Slowed Growth, Says NRF

SurveysNov 04, 2022

Holiday Sales to See Slowed Growth, Says NRF

Plus, how inflation and winter weather could impact holiday spending.

2021_Holiday gifts in bags.jpg
The National Retail Federation is forecasting holiday retail sales will grow between 6 and 8 percent year-over-year to between $942.6 billion and $960.4 billion.
Washington—Retailers can expect a merry holiday season this year, but sales won’t reach the highs of last year.

The National Retail Federation released its annual holiday sales forecast Thursday and is expecting retail sales to grow between 6 to 8 percent year-over-year to between $942.6 billion and $960.4 billion.

Last year, holiday retail sales were up nearly 14 percent year-over-year to a record-breaking $889.3 billion.

Over the past 10 years, holiday retail sales have averaged an increase of 5 percent, said the NRF, with the pandemic spending of recent years accounting for “considerable” gains.

Here are five key takeaways from the NRF’s holiday forecast.

Inflation remains a top concern for holiday shoppers.

The Federal Reserve is continuing its fight against inflation, raising interest rates six times this year, but rising prices are still weighing on consumers.

NRF CEO Matthew Shay described consumer behavior as more thoughtful and cautious during a forecast call Thursday.

“We know that lower- and middle-income consumers are feeling the most pressure when it comes to inflation,” said Shay, noting more of their income is going to housing, rent, energy, and food costs, leaving less for gifts and other holiday expenses.

These households are expected to rely more on their savings and credit to purchase holiday gifts.

In contrast, higher income households are expected to spend significantly more on average on holiday gifts, seasonal items, and other retail categories.

NRF Chief Economist Jack Kleinhenz said, “Consumers are worried about inflation. It’s on the top of their minds.”

A recent KPMG holiday survey came to the same conclusion, finding that inflation topped the list of shopper concerns, with 85 percent of those surveyed saying they were at least somewhat concerned about inflation.

“But they still have the ability to spend,” Kleinhenz added, noting consumers are supported by job growth, rising wages, and the ability to tap into savings.
Early shopping is here to stay.

The NRF defines the holiday season as Nov. 1 through Dec. 31, but the holiday season has been extending into fall for the last decade, it noted.

The early shopping trend is due in part to concerns about inflation and product availability, said Kleinhenz. 

In response to inflation, 46 percent of holiday shoppers said they would be browsing or buying before November, as per the NRF’s annual survey conducted by Prosper Insights & Analytics.

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

Consumers plan to spend $832.84 on average on gifts and holiday items, such as decorations and food, which is in line with the average for the last 10 years.

The labor market will be an ongoing challenge for retailers.

NRF expects retailers will hire between 450,000 and 600,000 seasonal workers this year, down from 669,800 seasonal hires last year.

Notably, the method used to calculate holiday retail employment in 2020 was changed to accommodate the significant impact of COVID-19 on overall industry employment, the NRF said. In 2021, it returned to a traditional employment buildup method.

Some seasonal hires may have been counted in October, said the NRF, as retailers look to bolster their teams before the holiday season.

Retailers looking to hire will have to compete, as always, with other industries, to find the best talent.

“It’s been a tight job market. We still have 800,000 job openings in retail as of the end of September,” said Kleinhenz. “It will be an ongoing challenge.”

Shay described the labor market as “a real conundrum for employers,” but noted it’s also a partial explanation for why consumers have continued to spend.

“[The labor market] is one of the reasons consumers have behaved in such a resilient way, because wages are increasing and there’s pressure on the market and that keeps people spending.”

Shay noted some retailers in need of employees have gotten creative, highlighting UPS’ plan to hire more than 100,000 seasonal workers. The company retains, on average, more than one-third as permanent employees.

 Related stories will be right here … 

Winter weather poses an unpredictable problem.

How retailers fare this holiday season may somewhat depend on where they’re located.

Warmer-than-average temperatures are expected in the Southwest, the Gulf Coast, and the Eastern Seaboard, according to the National Oceanic and Atmospheric Administration.

These sections of the country account for a large chunk of the U.S. population, noted NRF.

However, those located in the northern tier of the country are expected to see wetter and snowier weather.

Online shopping remains popular, but there may be a shift back to in-store shopping.

Online shopping will continue to grow this holiday season.

Online and other non-store sales, which are included in the total, are expected to increase between 10 and 12 percent to between $262.8 billion and $267.6 billion.

Sales in this category reached $238.9 billion last year, a significant jump as shoppers turned to e-commerce due to the pandemic.

However, the NRF said shoppers are also looking for a more traditional, in-store shopping experience.

The NRF’s holiday survey found 57 percent of respondents plan to shop online, up slightly from 56 percent last year.

The second-most popular destination was department stores (47 percent) followed by discount stores (44 percent).

As for what gifts consumers are hoping for, gift cards topped the list (54 percent), followed by clothing or accessories (49 percent) and electronics (24 percent). Jewelry was in sixth place at 21 percent, up from 20 percent in 2021 and 2020.

Overall retail sales are expected to grow between 6 and 8 percent year-over-year in 2022 to between $4.86 trillion and $4.95 trillion.

The Latest

Gina Drosos, Joan Hilson, and Jamie Singleton
EditorsMar 18, 2024
Q&A: Signet CEO Gina Drosos on Natural Diamonds

Drosos shared her top takeaways from a recent Botswana trip and her insights into the natural diamond market.

Claire’s storefront
MajorsMar 18, 2024
Claire’s to Launch in 4,400 Walgreens Stores

The retailer is expanding its footprint via retail partnerships, previously inking deals with Kohl’s and Macy’s.

Jewelers of America logo
MajorsMar 18, 2024
JA Partners with eBay on New Member Benefit

Members will now have access to “eBay Concierge,” a white-glove dedicated customer service team.

BTYB-HoBrothers-updated.png
Brought to you by
The Scalable, Professional, and Effortless Solution for High-Demand Custom Jewelry Retailers

Ho Brothers offers scalable solutions for the future of custom jewelry.

The Jewelry Symposium logo
Events & AwardsMar 18, 2024
The Jewelry Symposium Launches Inaugural Scholarship

The deadline to apply is March 29.

Weekly QuizMar 14, 2024
This Week’s Quiz
Test your jewelry news knowledge with this short test.
Take the Quiz
Brilliant Earth x Logan Hollowell Bloom earrings
FinancialsMar 15, 2024
Brilliant Earth Posts Record Sales, Orders in 2023

CEO Beth Gerstein spoke about the growing appeal of its non-bridal fine jewelry and its expansion plans on its recent earnings call.

Arkansas crater of diamonds eclipse tickets
SourcingMar 15, 2024
Crater of Diamonds State Park Selling Eclipse Tickets

Ticketholders can dig for diamonds in the Arkansas park ahead of the eclipse viewing event on April 8.

GIA id100
Brought to you by
Full Disclosure at Your Fingertips

Distinguishing natural diamonds from laboratory-grown stones – now more available than ever – has been difficult for jewelers. Until now.

Lotus Tiara
CollectionsMar 15, 2024
Piece of the Week: The Lotus Tiara

The versatile jewel pairs ancient Egyptian inspiration with a modern design.

Stock image of rough diamonds mined by De Beers
SourcingMar 14, 2024
De Beers Says Retailers Are ‘Restocking Conservatively’

The company’s rough sales improved for the third sales cycle in a row.

Gemological Institute of America logo
GradingMar 14, 2024
GIA Has a New Scholarship for High School Students in San Diego

The spring application window closes on March 31.

15.51-Carat Yellow Diamond
AuctionsMar 14, 2024
Phillips Hong Kong to Auction 15.51-Carat Yellow Diamond

It’s estimated to sell for up to $1.3 million at the upcoming sale on March 28.

Hedda Schupak
Events & AwardsMar 14, 2024
WJA Foundation Establishes Scholarship in Hedda Schupak’s Honor

It aims to support aspiring journalists, media professionals, content creators, and communicators.

Slick Rick
Events & AwardsMar 13, 2024
A Celebration of Hip-Hop Jewelry Is Coming to AMNH

“Ice Cold: An Exhibition of Hip-Hop Jewelry” will open at the New York City museum on May 9.

Dave Meleski
MajorsMar 13, 2024
Richline’s Dave Meleski Takes Over as RJC Chair

He succeeds David Bouffard, who is leaving Signet and the RJC next month.

Zachary’s Jewelers Mother’s Day kids jewelry contest
IndependentsMar 13, 2024
Zachary’s Jewelers Is Holding a Mother’s Day Jewelry Contest for Kids

Three winners will have their jewelry sketches turned into a real piece of jewelry in time for the holiday.

Boucheron Power of Couture
CollectionsMar 13, 2024
Boucheron’s New High Jewelry Collection Pays Homage to Ceremony, History

“Power of Couture” recalls Frédéric Boucheron’s love of fabric using diamonds and rock crystal.

Harry Winston diamond necklace
AuctionsMar 12, 2024
Top Lots Don’t Sell at Sotheby’s Signed Jewels Auction

A Harry Winston diamond necklace and other top lots failed to find buyers.

National Jeweler columnist Lilian Raji
ColumnistsMar 12, 2024
The PR Adviser: Closing Sales and Following Up

Lilian Raji offers advice to a business owner who is having trouble crossing the finish line with customers.

Steve Webb
MajorsMar 12, 2024
Steve Webb Named EVP of The Gordon Company

He brings 30 years of retail store management experience to the role.

Diamonds Do Good Awards logo
Events & AwardsMar 12, 2024
DDG to Honor 3 Industry Veterans in Vegas

At its annual gala, Diamonds Do Good will present awards to GIA, London Jewelers, and Lisa Bridge.

Cynthia Erivo
EditorsMar 11, 2024
This Year’s Oscars Jewelry Was the Definition of Glamour

Vibrant gemstones, layered diamond pieces and brooches with a story stole the show.

2024 Gem Awards audience
Events & AwardsMar 11, 2024
Gem Awards Highlight the Power of Retail, Community

The 2024 winners expressed gratitude to their teams, industry colleagues, and those who turn jewelry dreams into reality.

Jewelry from designers Jean Prounis, Marla Aaron, and Marie Lichtenberg
CollectionsMar 08, 2024
Pieces of the Week: Gem Award for Jewelry Design Nominees

They are Marla Aaron, Marie Lichtenberg, and Jean Prounis.

Peter Montalbano
Events & AwardsMar 08, 2024
Peter Montalbano to Receive JSA Industry Service Award

The Jewelers’ Security Alliance will honor the industry veteran at its upcoming annual luncheon.

Pomellato International Women’s Day video campaign
Policies & IssuesMar 08, 2024
Pomellato’s 2024 IWD Video Calls for an End to Violence Against Women

The annual video stars Pomellato CEO Sabina Belli alongside Jane Fonda and other celebrities and activists.

970x250.jpg
Supplier BulletinMar 07, 2024
Empower Your Team with IGI’s Comprehensive Educational Services

Sponsored by IGI

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy