The shift of the coronavirus crisis from a pandemic to an endemic state has brought with it the return of the holiday shopper and traveler.
Consumers continued to demonstrate a willingness to spend against inflation headwinds with holiday-focused retailer sales in October 2022 coming in at 6.45% year-over-year, the fourth highest October year-over-year change in the last 20 years, trailing behind 2021 at 12.68%, 2020 at 11.08% and 2005 at 6.62%. This is also in line with the RSM forecast for nominal total retail sales of 6.5% to 8.0% and sets up November to be the critical month for retail sales.
And while consumers are willing to spend during this time, they continue to use inflation-fighting tactics they deployed during the back-to-school season, like buying store-brand items and shopping more comparatively.
Consumers are also showing their willingness to gather this holiday season with October and November showing strong air passenger volumes of 2.2 million and 2.15 million total number of average daily passengers, respectively, according to the Transportation Security Administration.
The return of the holiday traveler is a boon for the restaurant industry, highlighted by only the second positive monthly increase in seated diners according to OpenTable; however, restaurants have continued to face labor shortages to meet the returning demand. Consumers seeking out spending on services this holiday season may have to temper expectations.
The results from Black Friday this year will be telling because it is the culmination of various factors coming together over multiple years. As for consumers, they are seeking to navigate balancing returning to in-person gatherings this holiday season, while also facing continued inflationary pressures that have cut into their built-up savings. For the retailers that have been dealing with elevated inventory levels, shortages in labor and increased margin pressure, they are relying on this holiday season to perhaps help hit the reset button for them before next year.
Look for additional insights as we continue our consumer products holiday season insights series.