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.

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.
Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

The Latest

FinancialsDec 06, 2022
Signet Anticipates Solid Holiday Season, Raises Guidance

The jewelry giant posted a decline in same-store sales in the third quarter but is gearing up for a season of growth.

TrendsDec 06, 2022
Pantone’s 2023 Color of the Year Is A Lot Like Rubellite, Spinel, Ruby

“Viva Magenta” easily finds its colored gemstone counterparts.

AuctionsDec 06, 2022
Jewels from the Sunken ‘Ship of Gold’ Smash Auction Estimates

Holabird Western Americana Collections offered hundreds of treasures recovered from the S.S. Central America in its Dec. 3 sale.

Brought to you by
How To Buy Colored Gemstones

Give your customers the full gemstone buying experience by using the 6C's.

ColumnistsDec 06, 2022
The Smart Lab: 6 Holiday Email Marketing Strategies To Boost Sales

From creating catchy subject lines to retargeting abandoned carts, Emmanuel Raheb has a half-dozen pieces of email marketing advice.

Weekly QuizDec 01, 2022
This Week’s Quiz
Test your knowledge of the latest jewelry news with this quick test.
Take the Quiz
IndependentsDec 06, 2022
CD Peacock Names VP of Client Engagement, Experience

Qi Holtzman is a member of the second generation to run the family-owned Chicago area jeweler.

IndependentsDec 05, 2022
Holocaust Survivor and Jeffrey Mann Jewelers Matriarch Rena Mann Dies

Mann, who opened the Ohio jewelry store with her husband and son in 1984, was 95.

Brought to you by
Knowledge and Skills for Today’s Hot Topics

From laboratory-grown diamonds to design to country-of-origin, GIA's Alumni Collective™ has a seminar to suite your needs.

TechnologyDec 05, 2022
Timex Ticks into the Metaverse with Bored Ape Yacht Club

The watch brand will create 500 custom timepieces for holders of Bored Ape Yacht Club NFTs.

EditorsDec 05, 2022
Meet Jewelry’s First TikTok Star

When it comes to translating luxury into the social media platform’s approachable style, JewelsWithJules has cracked the code.

Events & AwardsDec 05, 2022
WJA Foundation Awards Nearly $60K in Scholarships for 2022-2023

Scholarship winners received awards in six different categories.

SourcingDec 02, 2022
Alrosa CEO Sergey Ivanov to Step Down, Report Says

According to Russian news sources, the sanctioned head of the diamond company is leaving to take a job with an investment group.

SourcingDec 02, 2022
Lucapa Sells 170-Carat Pink Diamond Unearthed This Summer

Said to be the largest pink diamond found in hundreds of years, “The Lulo Rose” was sold for an undisclosed sum.

AuctionsDec 02, 2022
Here’s How 2 Royal Jewels Performed at Auction in Denmark

A princess’s tiara fell within its pre-sale estimate while an Art Deco bracelet from a queen doubled it.

CollectionsDec 02, 2022
Piece of the Week: Foundrae’s Chain

A closer look at the bold links reveals a subtle, surprising detail.

Supplier BulletinDec 01, 2022
Take Your Jewelry Design Process Digital with the GIA Alumni Collective™

Sponsored by GIA Alumni Collective™

WatchesDec 01, 2022
Rolex to Certify Pre-Owned Watches

Retailers within its official distribution network will be able to sell the authenticated timepieces.

CollectionsDec 01, 2022
Kendra Scott’s New Collection is for Barbie Girls

The capsule collection combines the brand’s classic styles with Barbie’s signature pink color.

AuctionsDec 01, 2022
13-Carat Pink Diamond Withdrawn From Christie’s Auction

The auction house is not offering any details on why the fancy vivid pink stone was pulled from its upcoming “Magnificent Jewels” sale.

SourcingDec 01, 2022
Nomad’s Is Selling Its Stones to Raise Money for Ukraine Again

In the spirit of an advent calendar, “Gems to Help Ukraine” will sell a stone a day through Dec. 24 on the Nomad’s Instagram account.

GradingDec 01, 2022
PhotoScribe Granted Patent for Method that Verifies a Stone’s Identification

The secure mark combines an overt mark with a covert data set to provide assurance on a gem.

WatchesNov 30, 2022
Watchfinder & Co. Will Launch a Marketplace Next Year

It will provide a place for select luxury watch retailers to sell their stock.

MajorsNov 30, 2022
Pomellato Buys Into Italian Goldsmith

The brand has purchased a minority stake in Costanzo & Rizzetto.

SourcingNov 30, 2022
Firestone Restarts Operations of Lesotho Diamond Mine

Liqhobong has been in a care-and-maintenance period since the start of the pandemic.

MajorsNov 29, 2022
LVMH Acquires Jewelry Manufacturer Pedemonte Group

The strategic acquisition will bolster the luxury titan’s production capacity in its watch and jewelry division.

CollectionsNov 29, 2022
Alex and Ani Founder Carolyn Rafaelian Has Launched a Fine Jewelry Line

The new brand, Metal Alchemist, focuses on unisex, classic jewelry designs.

IndependentsNov 29, 2022
Reinhold Jewelers’ Holiday Book Is an Ode to an Important Beverage

The 2022 edition of the retailer’s annual publication pays homage to the coffee farms and shops of Puerto Rico.


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