Growth in holiday spending to ease this year, Deloitte predicts

Retail sales data out Tuesday morning will offer a peek into how consumers are doing right now. As we inch closer to the holiday shopping season, a new forecast from consulting firm Deloitte predicts that holiday spending is likely to grow this year — but not quite as much as in the recent past. 

After the first year of the pandemic, consumers went big for the holidays. Spending jumped more than 15% in 2021 and 7.6% in 2022.

Last year, growth was slower and Deloitte expects it to moderate even more this year.

“I think it’s a return to normal,” said Michael Jeschke at Deloitte. “We’ve moved past the pandemic spike, and we’re going to see a normal 2.3% to 3.3% growth year over year.”

On the plus side, he said, the labor market’s solid. “You’ve got disposable income that is remaining strong, and inflation continues to come down too.”

At the same time, credit card debt is up and the savings rate is down. Bryan Eshelman at AlixPartners said it’s notable that consumers seem less willing to spend on experiences.

“Which is a real change in direction. That’s been a trend over the past few years, as people’ve been spending more on travel and entertainment,” he said. “And we’re seeing consumers express a desire to cut back on that type of spending” because it’s now a lot more expensive.