The National Retail Federation (NRF) has projected that winter holiday spending for November and December will increase by 2.5% to 3.5% over 2023. This would bring total holiday spending to between $979.5 billion and $989 billion, compared to $955.6 billion in 2023.

Strong holiday spending

Despite a cautious consumer outlook, NRF President and CEO Matthew Shay emphasized that the economy remains fundamentally strong, providing solid support for spending growth. “The economy continues to maintain its momentum heading into the final months of the year,” Shay said. “The winter holidays are an important tradition to American families, and their capacity to spend will continue to be supported by a strong job market and wage growth.”

Online shopping leads the way

Online shopping is expected to be a primary contributor to retail sales growth this season. Non-store sales, including e-commerce, are forecasted to grow between 8% and 9%, amounting to between $295.1 billion and $297.9 billion. This is a significant increase from last year’s $273.3 billion in non-store sales. However, the growth rate for non-store sales is expected to slow from last year’s 10.7% increase.

Cautious but optimistic consumer spending

NRF Chief Economist Jack Kleinhenz noted that while household finances are in good shape, consumers are expected to spend more cautiously this year. “We remain optimistic about the pace of economic activity and growth projected in the second half of the year,” he said, adding that the strong financial position of households will support steady holiday spending, albeit with some caution due to economic uncertainties.

As the holiday season approaches, retailers are preparing for another strong shopping period, with online shopping leading the charge as the preferred method for many consumers.