For the months of November and December, NRF said it expects retail sales for the 2016 holiday season to increase by 3.6% to $655.8 billion, excluding auto, gas and restaurant sales. This increase is much greater than the 10-year average of 2.5%, and even above the economic recovery average of 3.4% that began in 2009. Last year, holiday sales were up 3.2%, slightly lower than that average.
“All of the fundamentals are in a good place, giving strength to consumers and leading us to believe that this will be a very positive holiday season,” said NRF President and CEO Matthew Shay. “This year hasn’t been perfect, starting with a long summer and unseasonably warm fall, but our forecast reflects the very realistic steady momentum of the economy and industry expectations.”
Additionally, NRF is forecasting that between 640,000 to 690,000 seasonal workers will be hired for November and December, roughly flat with last year.
NRF’s forecast is based on economic modeling from consumer credit, disposable personal income and the previous monthly retail sales from releases. The forecast includes non-store categories such as direct-to-consumer, kiosks and online sales.
“Consumers have seen steady job and income gains throughout the year, resulting in continued confidence and the greater use of credit, which bodes well for more spending throughout the holiday season,” said Jack Kleinhenz, NRF chief economist. “Increased geopolitical uncertainty, the presidential election outcome and unseasonably warm weather are the main issues at play with the greatest potential to shake consumer confidence and impact shopping patterns. However, the economic spending power of the consumer is resilient and it should never be underestimated.”