EMarketer Pegs US Holiday Spend at $1.3T, With 6% Rise for Stores

U.S. holiday spending will reach $1.3 trillion during November-December, said eMarketer analyst Andrew Lipsman on a Thursday webinar on holiday shopping trends. Holiday sales will “maintain high growth” at 7% year on year, but dollars won’t stretch as far, Lipsman said.

Year-on-year holiday spending growth last year was 15.4% to $1.2 trillion, after 6.1% growth in 2020 to $1.1 trillion. Retail growth in typical years is 2%-4% over the official two-month holiday retail season, Lipsman said.

Inflation will “will loom large” over 2022 holiday spending, and categories that typically thrive in the final two months, including apparel, shoes and accessories, will take a back seat to essentials, Lipsman said. Consumers are looking to cut back on discretionary areas such as apparel and decor to prioritize dollars for groceries, gas, rent/mortgage and household goods, he said.

The outlook is strong for brick-and-mortar in holiday '22, with stores projected to have 69.9% of holiday season growth, Lipsman said. EMarketer forecasts store sales to rise 5.9% to $1.1 trillion. Of the total projected $239.2 billion in retail e-commerce spending, desktops and voice-enabled devices are expected to grow 10.6% to $127.8 billion; mobile shopping is seen continuing its double-digit growth trend, rising 13.7% to $111.4 billion, Lipsman said.

October sales events from Amazon, Target and Walmart pulled forward some sales from the two-month holiday season, Lipsman said, quoting Bank of America estimates that Amazon’s Early Access event for Prime members last week pulled in $8 billion.

Out-of-stock rates owing to pandemic supply chain disruptions are also fueling early shopping for the holiday season, Lipsman said. Out-of-stock messages were four times higher in the 2021 holiday season than in January 2020, just before COVID-19 hit, said the analyst, and they were 3.7 times higher during the 2020 holiday season vs. the prior year.

The supply chain, while still experiencing some shortages, “is getting better,” Lipsman said. Out-of-stocks and delivery times are “consistently improving,” but “wary consumers remain likely to get ahead of issues,” he said.

“Key tensions” for November-December retail sales are rising inflation vs. disposable income, consumer demand for experiences vs. demand for retail goods, product demand vs. availability and a longer shopping calendar, starting in October, vs. promotional “fatigue,” Lipsman said.