’Tis the season for retail sales forecasts for the upcoming holiday season. On Oct. 15, the National Retail Federation issued its annual outlook, which showed holiday spending is expected to grow between 2.5% and 3.5% over 2023. A day later, another major industry group — the ICSC, whose membership consists mainly of major shopping complexes — put out its forecast, which calls for such sales to grow 3% to 3.5%.
The ICSC also projects a 6% increase in food-and-beverage sales, bringing the total expected spend for the season to $1.66 trillion. In addition to the forecast, ICSC also released the results of its Annual Holiday Shopping Intentions Survey, which found that 241 million (92%) consumers plan to shop this year – 6 million more than in 2023 and the highest percentage since 2019.
“This year has shown a more reserved, yet resilient, consumer as an uncertain economic landscape and sensitivity to higher prices have impacted many households,” said ICSC President and CEO Tom McGee. “At the same time, falling inflation and steady consumer spending have kept retail sales on solid footing throughout the year, and we anticipate another strong holiday shopping season.”
Holiday shoppers plan to spend an average of $706 on gifts and related items – the most since 2018. Yet despite lower inflation, higher prices continue to weigh on consumers. In fact, nine in 10 holiday shoppers said inflation will impact their purchases – and 37% of shoppers said they plan to spend more this year with 42% attributing it to higher prices.
In response to higher costs, most consumers plan to spend more time looking for deals; nearly half plan to take advantage of deals and promotions, and 68% agree that searching for discounts or exclusive offers during the holiday season will encourage them to make more trips to physical stores, an increase of 7% over last year.
The survey found that physical stores continue to play a major role in holiday shopping, with 92% of respondents planning to visit such locales.
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“Brick-and-mortar remains a valuable driver of omnichannel shopping, as nearly all in-store shoppers also plan to buy online from the same retailer’s website, with almost half saying that browsing in stores will influence their purchases,” the report notes. “Visiting malls and shopping centers to shop, dine, and take advantage of other experiences and services is also a mainstay of the holiday season for 200 million consumers, led by Gen Z and millennials.”
Click here for more from the ICSC forecast.
