This year’s holiday spending is projected to rise, with an increase between 2.5% and 3.5% over last year, as reported by the National Retail Federation (NRF).

Consumers are expected to spend between $979.5 billion and $989 billion in total during the holiday months of November and December, compared to $955.6 billion in the same period last year, according to the NRF’s annual forecast for 2024.

NRF President and CEO Matthew Shay stated, “The economy has been doing well this year, providing a sturdy foundation, which has positively impacted both the consumer economy and the retail sector.”

Shay added, “Holidays are significant for many Americans, filled with family events and traditions that people save for throughout the year. These emotional connections boost demand, as shoppers are ready and excited to partake in the season.”

Shoppers Embrace Both Online and In-Store Options

According to Shay, consumers have become indifferent about whether they shop online or in-person, as many retailers have streamlined the shopping experience.

Nonetheless, the NRF noted that online shopping is projected to significantly contribute to the overall growth of retail sales. Sales from online and other non-store channels are expected to increase between 8% and 9%, totaling between $295.1 billion and $297.9 billion, up from $273.3 billion last year. In comparison, non-store sales saw a boost of 10.7% over 2022.

This holiday season is shorter than in previous years, with six fewer days between Thanksgiving and Christmas, amounting to 26 days, according to Shay.

However, Shay remains optimistic that this won’t deter shoppers.

“The significance of Black Friday has diminished in recent years, as we see that consumers start shopping earlier, and retailers offer deals sooner than ever,” he noted.

Factors that may impact holiday shopping include the economic repercussions of Hurricanes Helene and Milton, especially in North Carolina, as retailers strive to reopen stores while consumers affected by the hurricanes focus on essential expenses, explained Jack Kleinhenz, the NRF’s chief economist.

Shay also shared that seasonal hiring is expected to remain stable, as retailers have already increased their workforce throughout the year, predicting between 400,000 and 500,000 seasonal hires this year compared to 509,000 last year.

Experiential Spending on the Rise This Holiday Season

This week, Deloitte released its own holiday shopping survey.

“Consumers express more optimism about the economy and intend to increase their spending compared to last year, though their spending habits will shift towards ‘doing and décor’,” Brian McCarthy, a principal at Deloitte Consulting LLP, informed YSL News. “This year, we foresee consumers dedicating more of their budgets to non-gift purchases like decorations and party clothing, as well as experiences such as travel and festive gatherings. Essentially, holiday spending will increasingly focus on the aspects of the season that foster togetherness.”

Here are some key findings from the survey:

◾ Survey participants indicated they plan to spend an average of $1,778 this holiday season, marking an 8% increase from the previous year. This rise in spending stems from a favorable economic outlook and a focus on categories that highlight the spirit of the holidays, such as experiences (up 16% year-over-year) and non-gift items like décor and party clothing (up 9% year-over-year). Although retail purchases will account for 59% of average expected holiday spending, participants plan to allocate $536 for gifts, $507 for non-gift purchases, and $735 for experiences.

◾ Among the surveyed individuals, 70% anticipate higher prices. To adjust their spending, many plan to reduce self-gifting (32%, down from 48% in 2023) and participate in at least one promotional event (78%, up from 61% in 2023).

◾ Price promotions may challenge brand loyalty, as 62% of consumers stated they would switch brands if their preferred option is priced too high, and 48% plan to shop at more cost-effective retailers.

◾ The bulk of holiday spending is expected to occur in late November, despite a growing interest in promotional events in October.

◾ Shoppers plan to spend an average of $261 on hosting guests this season, with 70% willing to allocate more funds toward services or items that enhance the convenience of hosting.

Impact of Elections on Shopping Patterns

Holiday shopping may experience a slight delay during presidential election years, according to Kelly Pedersen, retail consulting leader at PwC, as consumers tend to be more distracted.

“Shoppers generally take longer to start their holiday shopping because of the distractions associated with elections,” Pedersen shared with YSL News.

According to Pedersen, the election and the weeks following it tend to significantly postpone holiday shopping. While some eager shoppers might kick things off early, a lot will choose to wait until Black Friday.

Retailers also refrain from promoting their holiday deals as vigorously during election cycles because political advertisements dominate the available airtime, he explained.

PwC, a consulting firm, projects a remarkable spike in overall holiday spending, expecting each shopper to spend an average of $1,638, a record figure. This marks a 7% increase from 2023, a 15% rise from 2022, and a staggering 38% jump since their initial holiday forecast in 2015.

However, PwC notes that this rising trend “hides a change in consumer behavior, as 85% are thinking about cutting back their spending over the next six months, particularly in nonessential areas such as dining out, clothing, and luxury goods.”