U.S. Holiday Sales Forecast

(Reuters) – U.S. holiday sales are expected to grow by as much as 3.5%, the slowest pace in six years, according to the National Retail Federation (NRF) forecast on Tuesday. Shoppers are becoming more frugal and selective with their spending on non-essentials.

Holiday sales are projected to rise between $979.5 billion and $989 billion from November to December, compared to a 3.9% growth to $955.6 billion last year.

Additionally, retailers plan to hire between 400,000 and 500,000 seasonal workers this year, down from 509,000 in 2023.

NRF remains optimistic about economic activity and growth in the second half of the year. NRF Chief Economist Jack Kleinhenz stated, "We expect consumers will continue to be more price conscious and pragmatic in their spending decisions, looking for discounts and better value for holiday goods, as still-high interest rates and lingering inflation in some categories continue to weigh on their minds," said NRF CEO Matthew Shay.

As consumers limit their spending and opt for cheaper alternatives across categories from groceries to apparel, companies are being forced to lower prices and offer more discounts.

Online and non-store sales are expected to expand by up to 9%, reaching $297.9 billion, compared to $273.3 billion in 2023.

A shorter holiday season, with only 26 days between Thanksgiving and Christmas, has compelled retailers, including Walmart, Target, Amazon, and overseas companies like Shein and PDD Holdings' Temu, to introduce early deals.

Furthermore, Deloitte has forecast that 2024 holiday sales will also see at their slowest growth in six years due to cautious shopping.