Ain’t no stopping consumers from shopping
By Alan Wolf, YSN
Not even high inflation and steep interest rates can dampen the spirit of holiday shopping, which is expected to drive a 6% to 8% increase in U.S. retail sales during November and December.
That’s the word from the National Retail Federation (NRF), the world’s largest retail trade association, which is pegging this year’s holiday haul at somewhere between $942.6 billion and $960.4 billion.
The gains, which are not adjusted for inflation due to wide variation between product categories, are roughly half last year’s 13.5% increase but well ahead of the average 4.9% seasonal spike enjoyed over the past decade.
Related: NRF ‘Cautiously Optimistic’ About Holiday Sales
According to NRF President/CEO Matthew Shay, consumers are providing a cushion for higher prices by supplementing spending with savings and credit. Added NRF Chief Economist Jack Kleinhenz, “The overall outlook is generally positive as consumer fundamentals continue to support economic activity. Despite record levels of inflation, rising interest rates and low levels of confidence, consumers have been steadfast in their spending and remain in the driver’s seat.”
Not surprisingly, lower and middle income households (earning less than $75,000 annually) are feeling the most pressure from higher prices, but still plan to spend an average of $606 per household on gifts, food, decorations and other holiday fare, according to an NRF Consumer Holiday Survey conducted last month, down from $655 last year. In contrast, households earning more than $75,000 expect to spend $1,304 on average this month and next, up from last year’s $1,247 in holiday purchases.
On the receiving side, gift cards are the most wished for presents this holiday season, cited by more than half of survey respondents. Electronics ranked fourth, after clothing and media, while home improvement essentially tied with sporting goods for the eighth position, cited by 17% of respondents.
As to where consumers will shop, 56% said they would let their fingers do the walking online, while 24% of respondents plan to visit small or local business.
About 46% of those polled began to shop and buy before November, a growing trend in recent years that was further spurred by concerns over inflation and product availability, the NRF said.