The National Retail Federation (NRF) recently released its annual report on projected holiday consumer spending for 2017 and it’s full of good news — for retailers, that is.
The report predicts a busy holiday shopping season with shoppers planning to spend significantly more than they did last year, which should make for strong retail sales (not to mention plenty of happy gift recipients). It’s also good news for the overall economy — no industry employs more workers than retail, which offers steady careers to one in four Americans — a full 42 million people.
Find out the forecast for this holiday season, so you can prepare your budget and keep your holiday spending in check.
2017: Holiday Retail Sales Looking Strong
The annual survey, which is compiled by Prosper Insights & Analytics, predicts holiday shoppers will be opening their wallets wide this year. The average consumer plans on spending $967.13 per person in 2017 compared to $935.58 per person in 2016 — that’s an increase of 3.4 percent.
The NRF credits rising incomes and falling unemployment for the surge in consumer confidence, and retailers are stocking up and launching promotions in anticipation of a rush. Retailers will land up to $682 billion in sales this year, and as much as a full 4 percent of that will come from holiday sales in November and December.
In 2016, shoppers began hitting the stores late because the traditional start of the holiday season coincided with an all-consuming presidential race. This year, however, consumers are tackling their holiday lists early and spreading out their budgets. Twenty-two percent began shopping in October, and 42 percent will start in November.
Consumer Spending: Who’s Buying What?
There are three kinds of holiday spending, and each takes up a different chunk of the $967.13 the average person will pony up at the cash register this year:
- Gifts: $608.06
- Flowers, cards, decorations and food: $218.08
- Non-gift items: $140.99
Shoppers plan to spread their dollars far and wide. When you remove online shopping, here’s the breakdown on where consumers plan to spend their money:
- Department stores: 57 percent
- Discount stores: 54 percent
- Grocery stores: 46 percent
- Clothing or accessory stores: 35 percent
- Electronics stores: 27 percent
- Local small businesses: 25 percent
- Craft and fabric stores: 18 percent
- Drug stores: 15 percent
- Specialty stores: 14 percent
Retail Sales: The Hottest Gifts of the Year
Appearing on a full 61 percent of wish lists, the most popular gift by far — for the 11th year in a row — is still gift cards and gift certificates. Clothing and accessories are next, followed by books and other media, consumer electronics and home furnishings and decor.
On the less-popular end of the list are jewelry, beauty and personal care products, leisure and sporting goods, and tools and home improvement merchandise.
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Holiday Shopping: A Year of Firsts
The report also found that it’s shaping up to be a record-setting year in several categories. First of all, 2017 is the first year in history that the Internet is the most popular shopping destination. A full 59 percent of buyers now prefer to shop online.
Another record-setter is in the purchase of imports. Retailers bought an all-time high amount of imported goods during the summer and fall in anticipation of a hot holiday market.
Holiday Spending Tips
You can stretch your holiday dollars much further by coming up with a plan. If a hot toy is on your list, make that your first purchase as early as you can get your hands on it. For basic toys, the best time to buy is two weeks before Christmas, when retailers discount common toys by as much as 70 percent.
Also, use technology to your advantage. Set up price alerts on discount sites like CamelCamelCamel so you’re aware when prices drop. Follow the retailers you like on Twitter so you can stay up to date on discounts, deals and flash sales. Finally, take advantage of free services like curbside pickup for online purchases to avoid paying shipping fees, and participate in free layaway programs.