US holiday retail sales outlook 2024

Pricing to drive modest holiday sales in 2024

EY-Parthenon forecasts a modest 3% rise in retail sales for the November and December 2024 holiday season, with downside risks on the horizon. Holiday sales are expected to surpass $1 trillion, setting a record high, but the 3% growth will lag the 4% gain in 2023 and 5.2% in 2022.
 

The August retail sales report highlights more cautious consumers, spending prudently amid elevated prices, higher interest rates and a cooling job market. While a retrenchment in consumer spending isn’t expected thanks to relatively healthy household finances, slower real disposable income growth will likely result in softer household spending growth into 2025.
 

The anticipated 3% holiday sales growth is close to the 3.7% annual average from 2010 to 2019, but most of this year’s increase will be price-driven. With inflation for holiday sales likely hovering around 2.5% by year-end, real volume sales are only expected to rise 0.5% year over year.
 

Online shopping continues its post-pandemic surge, with e-commerce expected to account for around 20% of holiday purchases this year.
 

The EY-Parthenon outlook notes that the economy is set to decelerate gently into 2025 as tight monetary policy and high costs continue to restrain private sector activity. While recession risks are contained, households will spend more cautiously as the job market softens and income growth slows. Lower inflation, reduced interest rates and a balanced labor market should pave the way for cooler but more sustainable growth in 2025.
 

Note: Our holiday sales forecast aligns with the National Retail Federation definition of retail sales excluding auto dealers, gas stations and restaurants over the month of November and December. 

Year-over-year percent change in holiday retail sales*