This year’s holiday sales growth is expected to remain above the 10-year average growth rate, but be somewhat less robust than last holiday season, according to a forecast released Tuesday by the retail industry trade group the National Retail Federation.
NRF is projecting holiday sales to rise 4.1 percent to $586.1 billion, as consumers grapple with a mixed economic picture. Continued weakness in the labor market is tempering other positives, including rising consumer confidence and an improvement in home prices, the group said.
“Recognizing the realistic variables that still exist in our economy that impact consumers and their spending, NRF’s forecast is neither negative nor extremely robust, but we do think Santa’s helpers should be prepared for some overtime this year,” said NRF President and CEO Matthew Shay, in a press release announcing the forecast.
This year’s forecast, which estimates retail sales during the months of November and December, compares with last year’s growth of 5.6 percent and the 10-year average holiday sales gain of 3.5 percent.
The NRF described consumers as cautious but capable, and described its forecast as “pragmatic.”
“There’s still some general anxiety amongst consumers when it comes to how the state of the economy is impacting their spending plans,” said NRF Chief Economist Jack Kleinhenz.
As a result, shoppers will likely spend carefully and look for promotional events and bargains.
So far, other forecasts are estimating growth to be somewhere between 3 percent and 4 percent.
The International Council of Shopping Centers said their 3.0-percent holiday sales estimate reflects their concern that Congress’s deliberations on automatic federal spending cuts and tax increases may hold the Christmas season hostage. Other factors such as the recent softening of the economy and rising gasoline prices also could weigh on spending.
Deloitte’s retail and distribution practice is expecting a gain of between 3.5 percent and 4 percent in the November through January period. They also estimate sales outside the store, a category that includes both online and mobile sales, will be robust, with a projected 15 percent to 17 percent gain. (Read More:It's Beginning to Look Like...Holiday Spending)
That is stronger than Shop.org’s projection. The NRF’s digital division expects online sales growth to moderate. In its first-ever holiday sales forecast, Shop.org projected online sales would rise 12 percent to about $96 billon.
Last year, the US Department of Commerce estimated fourth-quarter ecommerce sale growth to be 15 percent, year-over-year.
Over the past year, many traditional retailers have been investing in improving their mobile offerings and experimenting with ways to increase sales via social media platforms such as Facebook and Twitter. Retailers also are looking for ways to unify their online and physical stores so that a shopper has a similar experience no matter where they shop.
Some of this year’s holiday hiring will go to support these efforts.
The NRF said it expects retailers to hire between 585,000 and 625,000 seasonal workers, which is close to the 607,000 seasonal workers that the industry hired last year.
That forecast is a little less rosy than an earlier hiring forecast from consulting firm Hay Group, which projected hiring would be up from last year. (Read More:Happy Holidays! Retailers Are Looking to Staff Up)
So far, retailers such as Wal-Mart Stores , Toys ‘R Us, Kohl’s and Macy’s said they are expecting to hire more workers than last year. (Read More:Toys 'R Us Plans to Boost Hiring for the Holidays)
-By Christina Cheddar Berk, CNBC.com News Editor