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Every retail holiday season since the pandemic has been unique, and that will be the case again this year, National Retail Federation (NRF) Chief Economist Jack Kleinhenz said.

“The last few holiday shopping seasons have been filled with unmatched peculiarities for consumers and retailers alike,” Kleinhenz said. In 2020, sales surged 9.1% year-over-year despite the challenges of Covid-19, and there was a significant move to shopping online as Americans stayed home. Sharply rising demand overcame supply chain bottlenecks for a record growth rate of 12.7% in 2021. And holiday sales in 2022 rose 5.4% as savings built up during the pandemic provided a buffer against rising inflation and online shopping continued but more consumers returned to stores.

“This year, a whole new set of dynamics is in place,” Kleinhenz said. “The average household remains on relatively solid financial footing despite pressures from still-high inflation, stringent credit conditions and elevated interest rates. Recent revisions to government data indicate that consumers haven’t drawn down as much of their pandemic savings as believed earlier, and savings are still providing a buffer to support spending. The overall story for this holiday season is that it looks very good.”

NRF expects record spending during the holiday season – defined as 1st November through 31st December – and forecast retail sales to increase between 3% and 4% over 2022 to between $957.3 billion and $966.6 billion. The growth rate is consistent with the average annual increase of 3.6% from 2010 to 2019. And the projected total sales, which exclude automobile dealers, gasoline stations and restaurants to focus on core retail, would top the record of $929.5 billion set last year.

“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.”


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