NRF Forecasts Holiday Retail Sales to Increase Between 3.8 and 4.2 Percent

The following article is based on a press release issued by The National Retail Federation on October 3, 2019.

October 3, 2019 | The National Retail Federation (NRF) estimates holiday retail sales in November and December to increase between 3.8 to 4.2 percent over 2018, totaling between $727.9 billion and $730.7 billion. The forecast compares with an average annual increase of 3.7 percent over the past five years.

Online and other non-store sales, which are included in the total, are also expected to increase between 11 and 14 percent to between $162.6 billion and $166.9 billion, up from $146.5 billion last year.

It is yet to be seen how looming tariffs may impact these estimates. While some holiday merchandise is subject to new tariffs that took effect September 1, the fourth round of tariffs on other products—including toys —will begin on December 15.

"The U.S. economy is continuing to grow, and consumer spending is still the primary engine behind that growth," NRF President and CEO Matthew Shay said. "Nonetheless, there has clearly been a slowdown brought on by considerable uncertainty around issues including trade, interest rates, global risk factors and political rhetoric. Consumers are in good financial shape and retailers expect a strong holiday season. However, confidence could be eroded by continued deterioration of these and other variables."

Retailers are using a myriad of mitigation tactics to limit the impact on consumers, and the impact will ultimately vary by company and product, according to the NRF. Small businesses have already been forced to raise prices, while 79 percent of consumers surveyed for NRF in September voiced concerns that tariffs will continue to raise prices and potentially affect their approach to shopping.

Holiday sales during 2018 totaled $701.2 billion, an unusually small increase of 2.1 percent over the year before amid a government shutdown, stock market volatility, tariffs, and other issues. Last year, U.S. toy sales totaled $21.6 billion, a 2 percent decline after four years of consecutive growth, according to The NPD Group.

NRF’s holiday forecast is based on an economic model using several indicators including consumer credit, disposable personal income, and previous monthly retail sales. The number includes online and other non-store sales, but excludes excluding automobiles, gasoline, and restaurants.

The NRF is the world’s largest retail trade association. Based in Washington, D.C., NRF represents discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and internet retailers from the United States and more than 45 countries.