Holiday retail sales are forecast to be solid despite inflation headwinds
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The National Retail Federation predicts holiday spending will be healthy even with consumers facing recent inflationary challenges.
The 2022 NFRF forecasts holiday retail sales during November and December will grow between 6% and 8% year-over-year to between $942.6B and $960.4B. That is against a tough comparable from a year ago when holiday sales grew 13.5% over 2020 and factors in some sales being pulled forward into October with Amazon (AMZN), Target (TGT), Wayfair (W), Walmart (WMT) and other retailers running promotional events. 
Holiday retail sales have averaged an increase of 4.9% over the past 10 years, with pandemic spending in recent years accounting for considerable gains.
"In the face of these challenges, many households will supplement spending with savings and credit to provide a cushion and result in a positive holiday season," noted NRF President/CEO Matthew Shay.
"While consumers are feeling the pressure of inflation and higher prices, and while there is continued stratification with consumer spending and behavior among households at different income levels, consumers remain resilient and continue to engage in commerce," he added. 
NRF expects that online and other non-store sales, which are included in the total, to increase between 10% and 12% to between $262.8B and $267.6B as retailers ranging from Etsy (ETSY), Dick's Sporting Goods (DKS), Macy's (M), Best Buy (BBY) to Nordstrom (JWN) scrap for the attention of consumers.
The NRF holiday forecast took a number of economic factors into consideration, but the overall outlook was generally positive as consumer fundamentals are said to continue to support economic activity. 
Sector watch: Per a recent survey, consumers plan to spend $832.84 on average on gifts and holiday items such as decorations and food, which is called in line with the average for the last 10 years and an indication that consumers may battle through. Still, some analysts expect a trade-down effect and shift by consumers to a higher mix of apparel and travel-related services from other categories like electronics and hard goods to impact many retail stocks, while markdown, FX, and inflation pressures are still in the mix with Q4 bottom lines.