The National Retail Federation’s (NRF) 2023 November Economic Review released this week predicts what can likely be considered as pre-pandemic level of holiday sales spanning the November through December 2023 holiday period.
Contrasted with last year’s especially strong 5.4 percent level of holiday spending, the current forecast calls for a range of between 3 percent and 4 percent over 2022 levels. That equates to a range of between $957 billion to nearly $967 billion. A prior record established in 2022 was $929.5 billion for the two month period.
The NRF forecast noted a number of headwinds facing consumers as they enter this year’s holiday period. That are noted as elevated inflation levels, lower savings rates, higher credit card balances and higher borrowing costs for U.S. consumers.
Of the forecasted spending, the retail industry association expects online and non-store sales levels to increase between 7 percent to 9 percent. The forecast further reinforces that similar to last year, households are expected to focus most of their holiday shopping on traditional in-store purchases.
For all of 2023, NRF’s latest forecast estimate calls for an overall 4 percent increase in annual retail sales.
Regarding seasonal workforce hiring, the NRF indicates that retailers are expected to hire between 345,000 and 450,000 seasonal workers, somewhat equivalent with the 391,000 seasonal workers the industry hired last year.
Additional Perspectives
In late August, Supply Chain Matters highlighted the sentiment of major U.S. retailers relative to sales levels in the first half of this year, and expectations for the holiday period. Walmart indicated that for 2023, sales are expected to grow between 4 percent to 4.5 percent, up from a prior estimate of 3.5 percent. Target CEO Brian Connell indicated that while gearing up for one of the biggest holiday season in years, however the retailer would take a cautious approach to planning and financial guidance in anticipation of continued near-term challenges on topline growth.
U.S. consumers are likely already aware that this year’s Black Friday promotional events are already underway from major retailers such as Target, Walmart, Kohls and Costco. In October, Amazon sponsored a second Prime shopping promotion to preempt traditional in-store and online retailers which yielded a reported $51 billion in sales.
From an industry supply chain lens, Supply Chain Matters and other industry focused media has noted the lack of evidence from a global transportation and logistics lens as to any significant surge in inbound inventory required by retailers. This is generally attributed to an overhang of existing retailer inventory levels. This area will bear watching in the weeks to come.
China’s Singles Day Shopping Event
Later this week, the annual Singles Day shopping holiday event across China that occurs on the 11th day of the 11th month will occur. In the sense of tradition, this event was often seen as a barometer as to how holiday sales will fare across other global economies. Last year’s Singles Day was generally lackluster, a reflection of ongoing waves of Covid-19 induced restrictions on travel along with economically stressed Chinese consumers. Many eyes will be on reported results from this year’s event.
Stay tuned.
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