By Joan Verdon, Senior Contributor
The National Retail Federation and weather and consumer demand analytics firm Planalytics today issued an optimistic forecast for holiday spending, based on consumer behavior in November and expected weather patterns in December.
Planalytics is predicting the weather will have a positive impact on holiday spending, as expected mild weather during the final week before Christmas could bring more shoppers to stores.
The National Retail Federation (NRF) and Planalytics, in a webinar today on the expectations for December spending, said the outlook for the holiday season remains mostly sunny.
New Measurement Of Retail Sales
The NRF yesterday released its newly-created Retail Monitor data for November, showing that retail sales, excluding autos, gas and restaurants, were up 4.17% year-over-year, and 0.73% month-over-month.
The NRF partnered with CNBC and Affinity Solutions to create the Retail Monitor as a way to better reflect core retail sales. According to the NRF, unlike the survey-based retail sales data released every month by the Census Bureau, the Retail Monitor uses credit card and debit card purchase data compiled by Affinity, and does not need to be revised monthly or annually. The NRF released the report for the first time in November, with the October results.
The Census Bureau is scheduled to release its report for November in two days, on Thursday, December 14.
The Black Friday weekend, the traditional start to the busiest holiday shopping period, exceeded expectations for sales and store traffic, according to data from the NRF and companies that monitor in-store traffic.
Return to Pre-Pandemic Norms
November’s results show that the holiday is tracking to fall within the NRF’s forecast of 3% to 4% growth for the combined November and December months, Lea Grgich, NRF research analyst, said in today’s webinar.
“While we are seeing a slower growth rate compared to the past few years, this is consistent with the average annual holiday increase of 3.6% from 2010 to 2019,” Grgich said. “What this indicates is a return to pre-pandemic levels of spending,” she said.
While holiday sales soared in 2020 and 2021, rising 9.1% and 12.7% in those years, it was unrealistic to expect that rate of growth would continue, “but we are still seeing a healthy level of spend,” Grgich said.
NRF surveys had found that consumers plan to spend an average of $875 on gifts and holiday celebrations, up from $833 last year. Consumers also told that NRF that they had completed roughly half of their expected shopping in November, with about 50% of their spending to occur in December.
Warmer, With Likelihood Of Shopping
Last-minute shopping could get a boost this year if forecasts for a mild second-half of December in most of the country prove to be accurate.
While the third weekend of December is expected to colder in the South, the final week before Christmas is forecast to be milder than last year and warmer than normal, Evan Gold, executive vice president, global partnerships, at Planalytics.
While that could hurt sales of coats, and cold weather apparel, “it will be conducive for store traffic,” Gold said.
“No other external variable has the ability to drive demand or store traffic as immediately, meaningfully, and frequently as the weather,” he said.