Storms, it seems, can’t stop U.S. consumers from buying presents. The forecast from the National Retail Federation regarding the upcoming holiday season, which takes into account the recent spate of hurricanes, brings good tidings to retailers.
Although this year hasn’t been perfect, especially with the recent devastating hurricanes, a longer shopping season and strong consumer confidence will deliver retailers a strong holiday season.
Holiday retail sales in November and December — excluding automobiles, gasoline, and restaurants — are expected to increase between 3.6 and 4% for a total of $678.75 billion to $682 billion, up from $655.8 billion last year, according to NRF.
This year’s forecast would meet or exceed last year’s growth of 3.6% and the five-year average of 3.5%. While recent hurricanes are not expected to have a significant long-term effect on the economy, NRF states it is issuing this year’s forecast as a range rather than the usual fixed percentage because the impact of the storms on economic indicators has made it difficult to make a more precise forecast.
“Our forecast reflects the very realistic steady momentum of the economy and overall strength of the industry,” says Matthew Shay, president and CEO of NRF. “Although this year hasn’t been perfect, especially with the recent devastating hurricanes, we believe that a longer shopping season and strong consumer confidence will deliver retailers a strong holiday season.”
Christmas falls 32 days after Thanksgiving this year, one day more than last year, and is on a Monday instead of Sunday, giving consumers an extra weekend day to complete their shopping, according to NRF’s Holiday Headquarters.
“Consumers continue to do the heavy lifting in supporting our economy, and all the fundamentals are aligned for them to continue doing so during the holidays,” says Jack Kleinhenz, chief economist at NRF. “The combination of job creation, improved wages, tame inflation and an increase in net worth all provide the capacity and the confidence to spend.”
NRF’s forecast is based on an economic model using several indicators including consumer credit, disposable personal income, and previous monthly retail sales. The overall number includes the non-store category (direct-to-consumer, kiosks, and online sales).