Holiday Sales Forecast: $1.01 Trillion, With Half the Growth Coming From Higher Prices

Retailers are bracing for a bigger holiday season than last year, and a large share of the increase will come from higher prices rather than more stuff in the cart. The National Retail Federation, the largest U.S. retail trade group, said this week that it expects consumers to spend $1.01 trillion in November and December, up 4.2% from the same stretch a year ago. The forecast was reported by Anne D’Innocenzio of the Associated Press and carried by WSB-TV in Atlanta on October 15.

The number is not adjusted for inflation, and that detail matters more than the headline. For anyone who buys with an eye on quality and cost per year of use, it is the part of the story worth reading twice.

The forecast in plain numbers

Last year, according to the AP report, retailers took in $972 billion in holiday sales, a 3.1% gain over the year before. The NRF’s 4.2% projection sits above the 3.1% average annual gain of the past twenty years, a comparison that leaves out the pandemic holidays of 2020 and 2021. NRF chief economist Mark Mathews framed that as a stronger-than-typical season. The trade group’s chief executive, Matthew Shay, said households are coping with persistent inflation and uneven confidence, but that holiday spending remains a priority.

• NRF forecast: $1.01 trillion in November and December, up 4.2%, excluding auto dealers, gas stations and restaurants.
• Mastercard Economics Institute: a 5.5% rise in holiday sales from November 1 through December 24.
• AlixPartners: October through December sales up 4% to 7%.
• Adobe: U.S. online holiday sales of $275 billion, up 6.7%, a shade under last year’s 6.8% growth.

Economists cited in the report estimate that higher prices account for about half of the projected growth. Mastercard’s estimate lands in the same place. In other words, roughly half of the extra dollars shoppers are expected to spend will simply be buying the same goods at higher tags.

Who is carrying the spending

Higher-income households are expected to drive much of the increase, according to the AP account. Bryan Eshelman of AlixPartners said shoppers are trading down to cheaper brands and stores, buying earlier, and leaning more on credit cards and buy now, pay later plans. Mastercard’s chief economist, Michelle Meyer, pointed to a healthy job market as support.

The AP report also tied part of the price pressure to fuel. It said the U.S. war with Iran has pushed gasoline and diesel higher, with AAA putting the national average for regular gas at $4.33 a gallon on Thursday, against less than $3 before the war. The Labor Department reported this week that inflation accelerated in September, and the Commerce Department said retail sales rose 0.8% in September, with gasoline accounting for a large share of that gain.

That last point deserves some caution. A strong retail sales figure that is partly fuel is not the same as a strong appetite for merchandise. A forecast built on dollars can look healthy even when the number of items sold is flat.

What it means for people who buy good things on purpose

Readers here tend to buy fewer, better things: a briefcase that gets resoled and reconditioned rather than replaced, a coat that lasts a decade. Seasons like this one reward that habit, and they test it. When about half of the growth in spending is price rather than volume, the cheapest item on the shelf is not automatically the best value, but the most expensive one is not automatically the safest bet either.

A few habits help in a season when prices are drifting up and the sales calendar is crowded.

• Work out cost per use. A $400 item worn or carried 300 times costs about $1.33 per use, an illustrative calculation. A $90 item replaced every year costs more over five years.
• Shop earlier for what you will actually use. AlixPartners says shoppers are already moving up their timelines. Early buying can beat late-season stock gaps, though it only helps if you have settled on what you want.
• Be wary of buy now, pay later for gifts. Splitting a payment does not change the price. If a purchase only works on installments, it deserves a second look.
• Check the shipping and return window. Delivery costs and return deadlines are part of the real price, particularly for online orders placed in November.
• Look at the build, not the sale tag. A genuine markdown on well-made leather goods is rare. A permanent 40%-off sticker on something mediocre is not a deal.

Gifts that hold their value

For anyone shopping for a graduate, a new hire or a colleague, durable work gear tends to be the opposite of the price-inflated impulse buy. A leather briefcase, a good notebook, a quality belt or a wallet will outlast the season they were bought in, and the care they need is modest. If the budget is tight this year, one well-chosen item beats three forgettable ones.

What to watch before December

Forecasts like these are estimates. The NRF’s own history, and the range between the NRF, Mastercard, AlixPartners and Adobe numbers above, show how much room there is for the real result to land above or below. Gas prices, the next inflation report and the job market are the three variables most likely to move the outcome. If fuel eases, more household budget flows back to goods. If it climbs, expect more trading down and more promotions aimed at price-sensitive shoppers.

The practical read: the season is expected to be bigger in dollars, smaller in real terms than the headline suggests, and carried by shoppers with more room in their budgets. Plan your own spending by what you need and what will last, not by the size of the forecast.

This is general information about published forecasts, not financial advice. Forecasts can change, and actual results may differ.

Sources

• AP (Anne D’Innocenzio) via WSB-TV, “US retail trade group forecasts healthy holiday sales,” October 15, 2026: wsbtv.com