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Resources | Market Trends | November 30, 2023

Holiday Retail Forecast 2023: What Can We Expect From Year-End Shopping? 

Shoppers get off to a strong start, but many retailers are cautious about inventory.


Shoppers get off to a strong start, but many retailers are cautious about inventory.

Will shoppers keep spending during the end-of-year holiday season? Or will they cut back in response to higher costs, interest rates and other economic pressures? 

That’s the big question hanging over this year’s winter retail season. Consumer spending has remained strong for much of 2023, helping most developed economies avoid falling into recession. In many cases, spending also has been boosted by growth in wages.

But how will that hold up against consumer sentiment, which has darkened in some countries recently? In the US, consumer sentiment declined for the fourth month in November. In Europe, consumer confidence increased by a percentage point in November in both the European Union and the euro zone but overall remains well below the long-term average.

Not everyone views the economy the same way, though. Indian consumers, for example, have one of the most positive outlooks among economies, BCG reports, thanks to a strong economy, record-high stock market and other factors. According to BCG’s research, about 36% of Indian shoppers planned to spend more in all categories over the coming months versus 17% for consumers in all countries surveyed. 

In this post, we’ll look at the early results from the holiday shopping season, experts’ forecasts and other trends to keep in mind. 

How is the holiday retail season going so far?

Black Friday 

In the US, Black Friday spending was up 2.5% year over year, according to The Wall Street Journal, which cited combined online and in-store results from Mastercard SpendingPulse. Jewelry and apparel both recorded strong results. 

US consumers spent a record $9.8 billion on Black Friday ecommerce spending, up 7.5% from 2022, according to Adobe Analytics. At the same time, there was also a 47% jump in shoppers who used the “buy now, pay later” option — an indication of possible financial pressure.

Black Friday spending appears to have been slightly softer in the UK. Barclays, which handles about half of the nation’s debit and credit card transactions, said the volume of transactions declined by 0.65% compared to a year earlier. On the bright side, foot traffic surged in many stores — up at least 2% on a yearly basis and up 11% over the previous week. 

Cyber Monday

US shoppers spent an estimated $12 billion to $12.4 billion on Cyber Monday, compared to $11.3 billion a year prior, Adobe Analytics reported. 

Though calling it “Cyber Monday” might be something of a misnomer. Several retailers started their deals days earlier and kept them running for days after — doing everything possible to get the full benefit of those promotion strategies. 

As a result, the entire Cyber Week — the time between Thanksgiving and Cyber Monday — could generate more than $38 billion, Adobe reported

Other global gifting holidays and festivals

Diwali

The Confederation of All India Traders reported record sales of ₹3.75 lakh crore ($44.9 billion in US dollars or £35.4 billion) for brick-and-mortar and online stores, with more sales expected from other upcoming festivals.

Heading into the holiday, a survey found that 70% of respondents had planned to spend more during this year’s Diwali season, a 35% bump from the previous year, according to The Trade Desk, an advertising technology platform

Singles’ Day

Singles’ Day, the Chinese shopping holiday held on Nov. 11, recorded growth of 2.08% in gross merchandising volume (GMV) sales for the country’s leading ecommerce platforms, according to Syntun, a data provider. That’s down slightly from last year’s gain of 2.9%. 

A preholiday survey from Bain & Co. had predicted a muted shopping season for Singles’ Day. About 77% of respondents said they didn’t plan to increase spending. Almost half planned to buy discount or private-label brands.  

What do retail forecasts predict for the rest of the holiday season?

Generally speaking, industry watchers and trade groups say that consumers will spend more this year, though some believe that many consumers will cut back because of economic fears. 

That puts retailers in a tricky position. To the best of their ability, they must compete for holiday shopping budgets without overinvesting in inventory that doesn’t sell or being too generous with promotions, training shoppers to wait for steeper discounts. 

Globally, 70% of shoppers plan to spend the same or more this year

According to a survey from ESW, an international direct-to-consumer (DTC) company, about 43% of respondents said they’ll spend the same in 2023 as in 2022. An additional 27% will spend more, while 30% will cut back. 

Shoppers in India, United Arab Emirates and China were more likely to spend more during the 2023 winter retail season, while France, Germany, Australia and Canada had the highest shares of shoppers who plan to cut spending.  

US holiday spending expected to climb 3% to 4% over 2022

The National Retail Federation predicts that US consumers will spend between $957.3 billion and $966.6 billion on holiday shopping in November and December, a new record. That’s compared to $929.5 billion in 2022. 

An increase of 3% to 4% would represent a cooldown compared to the last three years, which saw year-over-year increases of 9.1% (2020), 12.7% (2021) and 5.4% (2022). But a gain of 3% to 4% is in line with the annual holiday growth of 3.6% between 2010 and 2019, the NRF reported.

Most UK shoppers will spend as much or more on holiday shopping compared to 2022

In the UK, about half of consumers expected to spend the same as last year, a PwC survey found, while a little less than 20% said they would spend more. One-third of respondents said they planned to spend less. Those findings were in line with a similar survey from Deloitte.

64% of consumers plan to cut back on gifts to close family and friends

Accenture surveyed more than 5,500 consumers and nearly 300 retail executives in the US, UK, Canada, France, Germany, Spain, Italy, Sweden and the Netherlands. Almost 60% planned to spend the same amount in 2023 as in 2022, though 30% expect to spend less. 

More consumers are planning to ‘trade down,’ seek bargains

According to a McKinsey survey, almost 80% of US respondents said they planned to trade down — either buy cheaper alternatives or simply not buy gifts for some friends and family. As a result, promotions and value will be more important in reaching shoppers. 


You may have seen promotional “Black Friday” emails land in your inbox a week or more before the actual day. Some retailers have been offering deals as early as September to entice shoppers. 

About 50% of consumers said they started buying Christmas gifts in October or earlier, McKinsey found in its survey. But those early birds didn’t complete all of their shopping — many are still waiting for further discounts later in the shopping season. 

The bottom line about the 2023 holiday season

India appears to have generated strong results. However, retailers in other regions should be aware of the potential for lower spending, even if early results from Black Friday and Cyber Monday look strong. 

To keep shoppers engaged, retailers might need to keep promotions running throughout the season and, when possible, offer flexible “buy now pay later” solutions to help cash-strapped consumers. 

Retailers may also want to avoid overextending themselves by investing too much in inventory. In fact, some of the world’s largest retailers have reduced their inventory this year after being overstocked last year, The Wall Street Journal found

If your company is a retail supplier, you might have a need for extra working capital through the end of the year. C2FO can help with our Early Pay solution, which empowers you to request faster payment of your invoices. Learn more here.

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