The National Retail Federation (NRF) expects as many as 166 million shoppers will make purchases between Thanksgiving Day and Cyber Monday, almost 8 million more than forecast last year and the highest estimate since 2017 when the group began tracking the statistic.
NRF forecasts holiday sales will total between $942.6 billion and $960.3 billion, up roughly 7% from a year ago. Last year’s holiday sales grew 13.5% over 2020 and totaled $889.3 billion, shattering previous records. Holiday retail sales have averaged an increase of 4.9% over the past 10 years, with pandemic spending in recent years accounting for considerable gains.
Economists at Wells Fargo have said inflation is fueling the top line retail growth number and overall sales are likely to increase about 2.5% when inflation is considered.
“While there is much speculation about inflation’s impact on consumer behavior, our data tells us that this Thanksgiving holiday weekend will see robust store traffic with a record number of shoppers taking advantage of value pricing,” NRF President and CEO Matthew Shay said. “We are optimistic that retail sales will remain strong in the weeks ahead, and retailers are ready to meet consumers however they want to shop with great products at prices they want to pay.”
NRF estimates 69% of U.S. consumers will shop this Thanksgiving weekend. Among those shoppers, 59% said the biggest reason they will be out is to find good deals, 27% said it’s tradition, and 22% said they enjoy getting out for something to do on the long weekend.
Retailers have already been offering pre-Black Friday deals to shoppers trying to woo customers into stores and online to make their gifting purchases. Walmart CEO Doug McMillon said recently stores were well-stocked with top holiday gift items at good values as more consumers are trying to stretch their holiday budgets.
Walmart and other retailers also continue to wrestle with excess inventory this holiday, a somewhat stark departure from last year when supply chain issues caused inventory shortfalls.
The NRF expects Black Friday will be a big day for retailers with 114.9 million consumers expected to shop in stores and online. The survey found 69% said they will head out to stores, up from 64% last year. Similar to 2020 and 2021, 60% of holiday shoppers this year began browsing and buying for the season as of early November. The consumer trend of earlier shopping was accelerated by the pandemic. In 2019, 56% of holiday shoppers began shopping around this time, according to NRF.
“While consumers continue to save the bulk of their holiday shopping for later in November and December, some of that spending has shifted into October,” said Phil Rist, consumer strategy exec with Prosper Insights. “This year, 18% of holiday shoppers have completed at least half of their holiday shopping. While this is on par with last year, it is up from only 11% a decade ago.”
NRF also reports 43% survey respondents said online search is the most popular source of gift inspiration, followed by 35% who look to family and friends. The top five gift categories consumers plan to give are clothing at 55%, gift cards at 45%, toys at 37%, books/music/movies/video games at 33% and food/candy at 31%, according to the NRF survey.
Total spending on gift cards is expected to reach $28.6 billion, compared with $28.1 billion in 2021. Similar to last year, holiday shoppers plan to purchase between three to four gift cards and spend an average of $51.47 per card ($165.87 per person). The most popular gift cards include 27% who prefer restaurant cards, 26% who choose department stores, 25% prefer bank-issued gift cards, and 10% plan to purchase a food delivery service gift card such as DoorDash or UberEats.