NRF: Census Data Shows 2023 Holiday Sales Grew 3.8%

Predicting retail outcomes can sometimes be a bit like forecasting the weather. As Barron’s pointed out, in 2023, economists almost unanimously forecast a recession for what turned out to be an economic boom year. Each year, the National Retail Federation (NRF) releases its holiday sales forecast based on economic modeling that considers employment, wages, consumer confidence, disposable income, consumer credit and previous retail sales. According to the U.S. Census Bureau data, the NRF appears to have been right on target with its 2023 predictions. In November, License Global reported the NRF’s 2023 holiday prediction that the 2023 holiday sales would increase between 3% and 4% over 2022 to between $957.3 billion and $966.6 billion. 

Data released by the U.S. Census Bureau shows that core retail sales during the 2023 holiday season grew 3.8% over 2022 to a record $964.4 billion, easily meeting the National Retail Federation’s forecast despite continued inflation and high interest rates, NRF said. Sales for the full year grew 3.6% over 2022 to a record $5.13 trillion.
Despite lingering concerns over a possible recession, people still went out and spent on holiday gifts. “Consumer spending was remarkably resilient throughout 2023 and finished the year with a solid pace for the holiday season,” says Jack Kleinhenz, chief economist, NRF. “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.”
The 2023 holiday sales results top the previous record of $929.5 billion spent during the 2022 season. 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. As early as October, License Global shared the NRF’s prediction that consumers would maintain their holiday spending habits with holiday budgets in keeping with trends from the last five years.

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NRF’s calculation of retail sales is based on Census Bureau data but excludes automobile dealers, gasoline stations and restaurants to focus on core retail. NRF defines the holiday season as Nov. 1 through Dec. 31.
The holiday total, which is not adjusted for inflation, includes online and other non-store sales, up 8.2% at $276.8 billion. NRF had forecast that the category would grow between 7% and 9% to between $273.7 billion and $278.8 billion. Online holiday sales were $255.8 billion in 2022.
The $5.13 trillion full-year total aligns 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 growth rate throughout the year. Full-year sales during 2022 totaled a then-record $4.95 trillion.

Earlier this month, License Global reported according to CNBC/NRF Retail Monitor, powered by Affinity Solutions, retail sales saw continued growth in December, completing a solid holiday shopping season. For December alone, retail sales, as defined by NRF, were up 0.7% seasonally adjusted from November and up 3.3% unadjusted year over year (YoY). By comparison, sales were up 0.4% month over month (MoM) in November and up 4.2% YoY.
According to the Census Bureau, overall December retail sales – including autos, gas and restaurants – were up 0.6% from November and up 5.6% YoY. In November, the Census numbers were up 0.3% MoM and up 4% YoY.
November-December holiday sales saw YoY gains in all but two of nine retail categories. The top three retail categories were electronics and appliance stores, health and personal care stores and online sales. Specifics from key sectors for the two months combined, all on an unadjusted YoY basis, include: