Holiday sales fall short of expectations, set stage for tougher 2023 for retailers

Holiday sales fell short of industry expectations, as shoppers felt pinched by inflation and rising interest rates, according to data from the National Retail Federation.

Sales during November and December grew 5.3% year over year to $936.3 billion, below the major trade group’s prediction for growth of between 6% and 8% over the year prior. In early November, NRF had projected spending of between $942.6 billion and $960.4 billion.

The sales forecast excludes spending at automobile dealers, gasoline stations and restaurants.

The gains include the impact of inflation, too, which drives up total sales. The consumer price index, which measures the cost of a broad mix of goods and services, was up 6.5% in December compared with a year ago, according to the Labor Department.

For retailers, the shopping season’s results reflect the challenges ahead. As Americans continue to pay higher prices for groceries, housing and more month after month, they are racking up credit card balances, spending down savings and having fewer dollars for discretionary spending.

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