Holiday Retail Spending Hasn’t Slowed Yet: Empirical Forecasts from a Family-Scale Trade Group in Maryland, and the National Retail Federation
Overall holiday spending hasn’t slowed yet, according to the National Retail Federation, but many families are making sacrifices to buy presents for their loved ones.
Retail sales for the combined November-December shopping months will grow between 6% and 8% this year compared with the 2021 holiday season, to between $942.6 billion and $960.4 billion, according to projections released Thursday from the National Retail Federation, the industry’s largest trade group.
Matthew Shay, president and CEO of the NRF, said in a statement that households in various income brackets are responding differently to how their budgets are impacted by inflation and high prices.
The group predicts that online holiday spending will increase between 10 and 12% to between $262.8 billion and $268.6 billion.
Retailers have done a good job starting the holiday season earlier this year, in some cases introducing Black Friday-style promotions in early October. This has helped jump start holiday sales ahead of schedule and could support more sales increases in coming weeks..
That compares unfavorably with last year’s robust 15.1% increase, but this year’s expected slower growth is in line with where holiday retail sales were trending pre-pandemic.
Remy, a human resources professional in Maryland, has felt the pain of high inflation in recent months. She asked her kids to cut down on their Christmas lists and searched for the best deals.
Remy told CNN there was a lot less spending and more budgeting this year. It is a few items for the kids, instead of getting them all of the things on their list.
The highest inflation since the 1980’s is making holiday budgeting harder for millions of middle-class families. The same poll found 42% plan to spend less on gifts this season and only 8% plan to spend more.
Janette is relying on coupons for the first time in order to afford gifts for her family. She wants her kids to have something to open on Christmas even though she can’t afford it.
She will, of course, look for something cheaper this year. “Not everybody will have the same quality of gift they used to get.”
An Optimal Budget for a Mother’s Day: Warren and her Husband Will Skip a Single Dollar a Year in the Holiday Season
In a Gallup poll this month, 55% of Americans said rising prices have caused financial hardship for their household, and 13% say that hardship is “severe.”
She and her husband have been dipping into savings and using credit cards, as they take care of their two children, due to higher prices on food, gas, energy and more.
“How do you create a budget when you don’t have any sort of extra income,” she said. I want to limit the amount of money I spend and make sure I don’t leave any savings behind.
She decided to limit her spending to $100 a year for each child. She and her husband want to get each other gifts, but it is on the priority list.
With gas prices down, Warren felt more secure heading into the holiday season, though she plans to buy less than in past years. Then she received news that she’s getting laid off from her job.
She stated she wanted to fill the tree a bit more than what she would be able to. As long as Laila is happy, we are all happy. She will not have gifts under the tree this year, but she will next year. That is all that matters.