In 2009, during The Great Recession, more than 60 percent of individuals indicated that the economy was impacting their holiday spending plans. This year, consumers have returned to 2009 levels of concern about the state of the economy, though there is little evidence of past behavior from the Great Recession returning as many are still planning to spend, according to the National Retail Federation’s (NRF) 2022 Holiday Retail Sales Forecast.
Holiday retail sales are predicted to grow by 6 to 8 percent this year. Ecommerce sales are included in the holiday forecast and are predicted to grow between 10 and 12 percent this holiday season.
Almost two-thirds of holiday shoppers acknowledge that it is important to spend on holiday gifts and celebrations. Holiday shoppers also estimate they will spend an average of $832.84 on gifts and holiday items this year, which is in line with the 10-year average.
However, consumers are feeling the impact of inflation in different ways. Higher-income consumers are planning to spend more than they did in 2021, while lower- to middle-income individuals are more cautious when setting budgets for the holiday season.
Inflation continues to be a dominant concern for retailers and consumers. As reported in November’s Monthly Economic Review, real gross domestic product increased 2.6 percent in the third quarter of 2022, showcasing a healthy economic increase that sets the tone for fourth quarter. Consumer spending is the largest contributor to that economic growth, says the NRF.
The personal consumption expenditure (PCE) index shows an average increase of 6.2 percent year-over-year, with an 8.1 percent increase on a year-over-year basis for goods and 5.3 percent for services as of September 2022, according to the U.S. Bureau of Economic Analysis. That’s an important index to consider because PCE accounts for substitution, a large factor for consumers shopping in an inflated market.
Consumers continue to shop early
As in past years, many consumers are continuing to begin holiday shopping before November. This year, consumers report the top reason they are shopping early is to spread out their holiday budget for gift shopping, as they try to avoid spending a large amount of their budget all at once. FLD
For more, visit www.nrf.com
