ICSC’s 2023 Holiday Shopping Forecast Shows Continued Consumer Spending and Resilience

ICSC’s 2023 Holiday Shopping Forecast Shows Continued Consumer Spending and Resilience

ICSC forecasts 3.8 percent increase in October-December retail sales despite current economic climate

NEW YORK, October 19, 2023 – Retail sales are expected to grow 3.8 percent this holiday season, according to ICSC’s 2023 holiday shopping forecast. Additionally, ICSC is forecasting a 7.6 percent increase on F&B, bringing the total expected spend for the season to $1.60T. Today, ICSC also released the results of its Annual Holiday Shopping Intentions Survey, which found that 235 million (90 percent) consumers plan to shop this year. 

“We expect a positive holiday shopping season this year as consumers continue to spend in spite of economic headwinds,” said Tom McGee, President and CEO of ICSC. “This year’s forecast shows the industry is balancing itself out after rapid growth over the last few years, setting retailers up for another  successful holiday season.”

ICSC’s survey found that eight-in-10 shoppers expect to spend about the same as or more than they did last year during the holiday season. This figure shows a slight uptick compared to the 73 percent of consumers who said the same in 2022, reflecting continued and consistent spending while navigating economic pressures like inflation and higher interest rates.

Forty-two percent of consumers attributed their expectation for increased spending to inflation and a higher cost of holiday items, while 54 percent plan to spend less for the same reason. Thirty-eight percent said they expect to spend more as holiday deals and promotions provide more value for their spending. On the other hand, of those who plan to spend less, 43 percent said it was due to a change in budget, regardless of job status or income.

The survey also revealed details of where, how, and when people intend to shop for the holidays. About 204 million people (87 percent) are expected to head to brick-and-mortar stores this holiday season, while three-quarters of respondents said they plan to make a purchase online and have the items shipped to them. Expected spending is evenly split between online and in-person shopping, with 41 percent of total expenditure expected to happen at a physical store, 42 percent to be spent online, and 17 percent on click-and-collect.

Consumers anticipate consolidating their purchases across fewer retailers this holiday season, as they plan to purchase from an average of 2.4 different types of retailers, compared to 3.4 in 2022. Discount department stores remain the most popular stop for 63 percent of shoppers. Traditional department stores are the second-most popular destination (34 percent), followed by electronics stores (22 percent).

During those shopping trips, most consumers plan to pay with a debit (63 percent) or credit (50 percent) card. Nearly half (48 percent) expect to pay with cash, while 14 percent will leverage buy now, pay later options.

Gift cards remain the most popular category for purchases – an item that’s on the shopping list of 63 percent of respondents – followed by apparel and footwear (56 percent), and toys and games (49 percent). Forty-five percent of consumers plan to purchase food, like pre-packaged baskets and alcohol, while electronics and experiential purchases were cited by 41 percent and 22 percent of respondents, respectively.

As retailers continue to roll out seasonal assortments and deals earlier, 79 percent of consumers plan to start shopping for the holidays earlier than they normally would. In fact, one-in-four already started their holiday shopping in August or earlier. Of the consumers who plan to shop earlier for the holidays, 51 percent do so for the early promotions.

“This year will continue the trend of consumers starting their holiday shopping earlier and spreading it out throughout the season,” McGee added. “While landmark holiday milestones like Black Friday and Thanksgiving Weekend remain important, it’s equally important for retailers to capture consumer interest throughout the season. Offering competitive promotions, free and reliable shipping, and seamless omnichannel experiences throughout the holidays is a key part of that.”

Methodology
The 2023 ICSC Holiday Intentions Survey was conducted online from September 22-24, 2023. The survey represents a demographically representative sample of 1,007 respondents.

About ICSC
The member organization for industry advancement, ICSC promotes and elevates the marketplaces and spaces where people shop, dine, work, play and gather as foundational and vital ingredients of communities and economies.  ICSC produces experiences that create connections and catalyze deals; aggressively advocates to shape public policy; develops high-impact marketing and public relations that influence opinion; provides an enduring platform for professional success; and creates forward-thinking content with actionable insights – all of which drive industry innovation and growth.  For more information, please visit www.ICSC.com.