Holiday spending projected to hit new record this year
FILE - Shoppers pass near a Christmas tree display at the Von Maur store at the Oxmoor Mall on December 22, 2023 in Louisville, Kentucky. (Photo by Jon Cherry/Getty Images)
The National Retail Federation (NRF) projected that holiday spending will increase this year to a new record, totaling between $979.5 billion and $989 billion, as consumers lean on e-commerce.
This reflects a growth of up to 3.5%, which would be the slowest pace in six years. Last year, holiday sales grew 3.9% to $955.6 billion.
E-commerce is being credited as the primary driver of the retail sales growth for the 2024 holiday season, according to the NRF, the nation's largest retail trade group.
Specifically, online and other non-store sales are expected to account for between $295.1 billion and $297.9 billion of the total spending, up from $273.3 billion last year, according to NRF estimates.
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Notable differences between this year and last include the shopping period between Thanksgiving and Christmas being nearly a week shorter, totaling 26 days, and the economic impact of Hurricanes Helene and Milton.
Despite consumers still feeling pressures, particularly due to a sluggish U.S. job market, NRF chief economist Jack Kleinhenz is optimistic "about the pace of economic activity and growth projected in the second half of the year."
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"Household finances are in good shape and an impetus for strong spending heading into the holiday season, though households will spend more cautiously," Kleinhenz said.
Adobe projected earlier this season that online spending was going to be largely driven by a surge in discounts and the popularity of buy now, pay later services.
In fact, the buy now, pay later services, which allow consumers to pay in installments, will drive a record $18.5 billion in online spending, up 11.4% year over year.