According to combined forecasts from the National Retail Federation (NRF) and the International Council of Shopping Centers (ICSC), consumers are planning to spend more this year than they did in 2022. On average, shoppers anticipate spending $875 on holiday essentials, representing a growth of 3.8% in retail sales this season. Additionally, a 7.6% boost in Food & Beverage spending is projected, culminating in an expected season total of $1.60 trillion.
Interestingly, while 92% of U.S. adults plan to enjoy winter holiday festivities, the ICSC’s Annual Holiday Shopping Intentions Survey revealed that a staggering 235 million (90%) consumers have shopping on their agenda.
Factors like inflation and the rising costs of holiday items are influencing consumer spending habits. 42% of shoppers admit these economic pressures will result in them spending more, while 54% plan to spend less for the same reasons. However, the allure of holiday deals and promotions is anticipated to encourage 38% of the respondents to increase their expenditure.
Consumer behavior surrounding the shopping environment is evolving. Although 204 million (87%) are expected to visit physical stores, online shopping is not far behind. The projected spending is almost equally divided between these two platforms: 41% in brick-and-mortar stores, 42% online, and a notable 17% using click-and-collect services.
One notable trend is consumers’ intent to consolidate their shopping, aiming to purchase from an average of 2.4 retailer types this year, a decrease from 3.4 in 2022. Discount department stores are the top choice for 63% of shoppers, followed by traditional department stores and electronics outlets.
Gift cards remain the hot favorite among consumers, with 63% aiming to buy them. Apparel and footwear, toys, games, food items, and electronics follow closely. Notably, experiential gifts are on the list for 22% of consumers, reflecting a rising trend towards gifting experiences over tangible items.
Another shift in consumer behavior is the timeframe of shopping. With retailers starting their promotions earlier, 79% of consumers intend to commence their holiday shopping sooner than usual. Early promotions are the primary motivation for 51% of those starting ahead of time.