The National Retail Federation (NRF) said Tuesday that holiday sales are on track to set a new record in 2024 and could increase by up to 3.5% from 2023.
NRF projects holiday retail sales from Nov. 1 to Dec. 31 will total approximately $980 billion and $990 billion, up from $955.6 billion for the same period in 2023.
The expected increase in consumer spending comes in the wake of curbing inflation that has plagued the economy after the pandemic and a long-awaited interest rate cut last month that helped ease borrowing costs for consumers.
The labor market has remained strong amid the Federal Reserve's years of interest rate hikes, despite predictions of a recession that never materialized. Wage growth is also outpacing inflation, giving consumers a lot of breathing room after years of high prices eroding their purchasing power.
“Overall, the economy is in good shape this year,” NRF President and CEO Matthew Shea told reporters. “We know that consumers continue to show resilience and strength in their spending as we head into the holiday season.”
The ongoing online shopping boom is expected to drive overall retail sales growth, particularly due to increased adoption of artificial intelligence (AI) tools by retailers.
Online and non-store sales could increase 8-9% from last year, totaling $295.1 billion to $297.9 billion. This is an increase from last year's $273.3 billion.
“Retailers, like other businesses, will find new ways to adapt AI to help them do everything they do with consumers in more efficient, effective, and more successful ways. And this holiday season, it's about being able to operate more efficiently internally in terms of the tasks that the retailer side teams are doing, whether it's direct involvement or fulfillment. I think you're starting to understand,” Hsieh said. .
