The National Retail Federation (NRF) has projected that holiday spending is set to reach a new record this year, with estimates ranging between $979.5 billion and $989 billion. This increase reflects a growth rate of up to 3.5%, which is the slowest pace seen in the past six years. E-commerce is playing a significant role in driving retail sales growth for the 2024 holiday season, according to the NRF.
Specifically, online and other non-store sales are expected to make up between $295.1 billion and $297.9 billion of total spending, up from $273.3 billion in the previous year. The shorter shopping period between Thanksgiving and Christmas, totaling 26 days, and the economic impact of Hurricanes Helene and Milton are notable differences between this year and last.
Despite ongoing economic pressures, particularly in the U.S. job market, NRF chief economist Jack Kleinhenz remains optimistic about the pace of economic activity and growth in the second half of the year. Strong household finances are expected to drive spending during the holiday season, although consumers are likely to be more cautious with their spending.
Online spending is projected to be boosted by discounts and the popularity of buy now, pay later services, with Adobe forecasting a record $18.5 billion in online spending driven by such services. This represents an 11.4% increase from the previous year.
Overall, the holiday spending forecast for 2024 reflects a mix of positive indicators, such as strong household finances and the growing influence of e-commerce, as well as challenges like a shorter shopping period and economic uncertainties. The retail landscape is evolving, with online shopping and alternative payment options playing key roles in shaping consumer behavior and driving sales growth.