In a report that could offer retailers more confidence to make first quarter advertising buys, the National Retail Federation says its final tally on holiday sales came in at the high end of its projections. NRF says core retail sales during the 2023 holiday season grew 3.8% over 2022 to a record $964.4 billion. The trade group had said it expected sales to climb in the three to four percent range. Despite a slower growth rate compared with the past three years, when trillions of dollars of stimulus led to unprecedented rates of retail spending during the pandemic, 2023’s holiday spending was consistent with the average annual holiday increase of 3.6% from 2010 to 2019 even with continued inflation and high interest rates. The holiday total, which is not adjusted for inflation, includes online and other non-store sales, which were up 8.2%. NRF had forecast that the category would grow between 7% and 9%.
“Consumer spending was remarkably resilient throughout 2023 and finished the year with a solid pace for the holiday season,” NRF Chief Economist Jack Kleinhenz said in a statement. “Although inflation has been the biggest concern for households, the price of goods eased notably and was helped by a healthy labor market, underscoring a successful holiday season for retailers.”
NRF’s calculation of retail sales but excludes automobile dealers, gasoline stations and restaurants to focus on core retail. NRF defines the holiday season as November 1 through December 31.
Just as encouraging is NRF says full year retail sales grew 3.6% over 2022 to a record $5.13 trillion. That total is in line with NRF’s most recent expectation that 2023 annual retail sales would increase about or just below 4% over 2022, reflecting a slowdown in the rate of growth throughout the year.
There was also some acceleration in sales at year-end. For December alone, retail sales as defined by NRF were up 0.7% from November and up 3.3% year over year. By comparison, sales were up 0.4% month over month in November and up 4.2% year over year. November and December holiday sales saw year-over-year gains in all but two of nine retail categories, led by electronics and appliance stores (+9.3%), health and personal care stores (+9.0%), and online sales (+8.2%).