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Holds 6%-8% Growth Forecast

'Unpredictable' Holiday Season Continues With Higher Store Traffic: NRF

The 2022 holiday shopping season continues to be unpredictable, said National Retail Federation CEO Matthew Shay on a Tuesday call, announcing Thanksgiving weekend shopping traffic that was higher than expected.

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Though consumers are dealing with headwinds in inflation, higher interest rates and a tight labor market, 196.7 million said they shopped, or planned to shop, over the five-day Thanksgiving weekend, up 17 million from last year, said a survey released Tuesday by NRF and Prosper Insights & Analytics.

Shay touted consumers’ return to stores on Black Friday, saying 72.9 million consumers opted for “a more traditional in-person shopping experience,” up from 66.5 million last year when consumers were dealing with the COVID-19 omicron threat. Over 122.7 million people visited physical stores over the weekend, up 17% year on year. Shay noted the number of online shoppers grew but at a “slower pace,” 2%, vs. 2021.

Deals played a major role in consumers’ shopping, with 42% of respondents saying deals were better than they expected. Some 86% said they expect great discounts to continue through the rest of the season, which Shay said “suggests that there’s going to be continued momentum” as consumers look for deals that keep them “engaged” and “out shopping for the next four weeks.” Some 47% said they were “almost halfway done” with holiday shopping, said Prosper Executive Vice President-Strategy Phil Rist.

NRF didn't raise its revenue forecast for the Nov. 1-Dec. 31 holiday season based on higher than expected shopping numbers over the Thanksgiving weekend or consumers’ stated shopping plans. The trade group’s forecast of 6%-8% growth to $942.6 billion-$960.4 billion is an economic forecast based on data, Shay said in Q&A, vs. a calculation based on survey responses. Its growth estimates aren't adjusted for inflation, he said.

Shoppers spent an average $325.44 on holiday purchases over the weekend, up from $301.27 a year ago; $229.21 was directed specifically toward gifts, NRF said. About 23% of shoppers bought electronics and 24% bought books, video games and other media. Top destinations for shoppers over the Thanksgiving weekend were online (42%), department stores (42%), grocery stores (40%), clothing and accessories locations (36%) and discount stores (32%), said the survey.

Some 87.2 million consumers shopped online Black Friday, similar to last year, and 77 million planned to shop online on Cyber Monday, said the survey of 3,326 adult consumers, fielded Nov. 23-27. Small Business Saturday had 63.4 million in-store shoppers, Shay said, up from 51 million in 2021. Of those, 77% said they shopped specifically that day to support small retailers.

Shay deferred questions about the possibility of recession: “The only ‘r’ word I was focused on was the railroad strike,” he said, calling the potential strike by more than 100,000 rail workers planned for next week a “bigger threat in the near term.” That threat lessened by Tuesday afternoon after President Joe Biden urged Congress to intervene. Shay supported the president’s move, saying a strike in the rail system “would be devastating for our economy because of all the goods that are moved by freight rail.”

During the holiday season, “the kinds of economic factors that impact consumer behavior and consumer psyche come from a variety of places, and anything disruptive would both directly and indirectly affect the retail industry,” Shay said. Some 70% of economic activity in the U.S. involves consumption, he said, which is based on consumer behavior: “Anything that disrupts consumer behavior is going to impact consumption and economic activity."