UPDATE: The National Retail Federation (NRF) has just announced that holiday retail sales in 2025 are projected to surge past $1 trillion for the first time ever. Sales for the November and December period are expected to grow between 3.7% and 4.2% compared to last year, reaching between $1.01 trillion and $1.02 trillion.
This significant increase in consumer spending comes despite historically low consumer sentiment, as noted by NRF President and CEO Matthew Shay. “We see consumers sharing with us their attitudes and their sentiments, which are by historic standards, continue to be very, very low — and yet they continue to spend and power the economy,” Shay stated.
The NRF attributes this spending momentum to retailers’ innovative strategies to avoid passing on price increases to consumers. Shay emphasized that “no one wants to pass on price increases,” and retailers are working creatively to maintain prices on essential goods, especially those impacting lower-income households.
Meanwhile, NRF Chief Economist Mark Mathews indicated that while consumer sentiment remains weak, household balance sheets are in good shape, thanks to rising equity markets and stable housing prices. Mathews pointed out that wages have outpaced inflation for over 30 months, allowing consumers to maintain disposable income for holiday shopping.
As the holiday season approaches, an increasing number of consumers are opting to delay purchases until the Thanksgiving weekend and Black Friday sales, indicating a trend toward value-seeking behavior. “A larger percentage of consumers are holding off until the Thanksgiving weekend,” Mathews added, reflecting a shift in shopping habits.
In terms of labor, the NRF estimates that retailers will hire between 265,000 and 365,000 seasonal workers, which is below last year’s 442,000 hires. This aligns with a slower-paced labor market, signaling economic caution as organizations prepare for the upcoming shopping rush.
With the holiday season being a crucial component of annual spending, both Shay and Mathews express optimism about the upcoming months. Consumers are preparing and saving for holiday expenses, and retailers continue to adapt to meet demand without burdening shoppers with higher prices.
Stay tuned as we continue to monitor these developments, and prepare for what promises to be a record-setting holiday shopping season in 2025.
