The National Retail Federation (NRF) anticipates a distinctive holiday shopping season this year, with Chief Economist Jack Kleinhenz highlighting the uniqueness of each season since the pandemic’s onset.
NRF projects record spending during the holiday season (November 1 to December 31, 2023) and expects sales to be up 3%-4% over 2022, reaching between $957.3 billion and $966.6 billion. This growth rate aligns with the average annual increase from 2010 to 2019. Excluding automobile dealers, gasoline stations, and restaurants, the projected total sales would surpass the record of $929.5 billion set in the previous year.
Kleinhenz commented on the past seasons, noting the surge in 2020 sales despite the challenges of Covid-19, the significant move to online shopping, and the record growth rate of 12.7% in 2021. In 2022, holiday sales rose by 5.4%, with pandemic savings acting as a buffer against inflation. For the upcoming season, Kleinhenz emphasizes a new set of dynamics, with households remaining financially stable, pandemic savings providing support, and a positive outlook for holiday spending.
“While there is significant uncertainty surrounding the measurement of how well the economy is performing, it continues to move forward and defy recession predictions, proving it to be more resilient than anticipated,” Kleinhenz said. “I expect the recent rhythm of spending will continue into the holiday season and that consumers will continue to spend on a range of items and experiences but at a slower pace. Households are starting the season in decent financial shape and are managing the constraints of their paychecks amid higher interest rates and higher monthly financial obligations as they seek to maintain their mode of living.”
According to Mastercard SpendingPulse™, published in early October, US retail sales, excluding automotive, are projected to rise by 3.7% year-over-year during this year’s holiday season (from November 1 to December 24). According to the report, consumers are expected to shop across various channels, with e-commerce predicted to increase by 6.7%, and in-store sales to rise by 2.9% year-over-year. However, jewelry sales are projected to decline by 0.3% compared to the same period last year. By comparison, Mastercard expected jewelry sales in the 2022 Holiday Season to grow 2.2%.
In a recent article, diamond analyst Paul Zimnisky discussed how a potential resurgence in the U.S. engagement ring market from 2024 to 2026 could act as a catalyst for diamond demand. This expectation is based on the timing of marriage engagements, which often occur around three years after couples begin dating. Adjusting for the pandemic’s impact, which delayed the formation of new relationships, a new cycle of bridal engagements is anticipated.
