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U.S. Department of State

Diplomacy in Action

The 2016 Holiday Forecast: U.S. Spending and Retail Trends

Ana Serafin Smith, National Retail Federation
New York, NY
December 14, 2016


MODERATOR: Good afternoon and welcome, everyone. The New York Foreign Press Center is pleased to welcome Ms. Ana Serafin Smith, senior director for media relations at the National Retail Federation. She will offer an overview today of 2016 U.S. retail trends, the holiday spending forecast, consumer confidence, and external factors impacting holiday spending this year. Ana will give her overview and then we’ll turn it over to you for your questions. A reminder that this briefing is on the record and we’ll make a transcript of the engagement available shortly after we wrap up today. Many thanks and I will turn it over to Ana.

MS SMITH: Good afternoon, everyone. Thank you for joining. We are 10 days away from the end of the holiday season and have seen some great strides from consumers over the last couple of months. Just today, we announced our November retail sales which grow solid 5 percent year over year. This is helping us keep on track with our holiday forecast, which we shared earlier in the season. We’re expecting holiday sales to increase at 3.6 percent. We’re at about $656 billion in retail sales.

As we look at the 3.6 percent, these sales will come in large part from grocery stores, department stores, discount stores, and online shopping. When we pick apart the forecast, here are some of the top takeaways. We’re optimistic that retailers will see healthy holiday sales growth. That 3.6 percent reflects a very realistic, slow-growth momentum of the economy and industry expectations. Although the year hasn’t been perfect starting with an unseasonably warm winter and long summer, that impacted several retailers and their businesses and earnings, so there is definitely some strong comparisons to the 2015 holiday season. But overall, we believe 3.6 percent represents healthy, solid growth for this year.

In addition, consumers are in a very strong position relative to where they have been since the recession. They continue to do the heavy lifting by keeping the economy growing steadily. In general, consumer behavior continues to reflect a fairly rational and cautious tone by historical standards. With personal income growth at about 3.3 percent on a year-over-year basis, it makes sense that consumers are spending more than in past years. As long as consumers remain confident and continue to spend, the economy will stay on track to grow.

Lastly, household net worth hit a new all-time record of 89.1 trillion at midyear due largely to higher home values. The combination of job creation, improved wages, tamed inflation, and the increase in net worth means the capacity and the confidence to spend exists. The willingness to spend is certainly evident, as seen in our data, but consumers remain pragmatic for the most part buying only what they need. With all that said, we remain cautiously optimistic that the pace of the economic activity will pick up in the near term.

When we look a little bit further in regards to how and where consumers are spending during the holidays, one of the things that we learned is that their average spent is going to be approximately $936. This is second only to the record-high spending level set last year at $952. Fifty-eight percent of consumers plan to take advantage of holiday deals to make non-gift purchases. Total spending for this category has reached its second highest ever at $139 compared to $140 in 2012. This is an approach that we like to call “one for you, two for me,” and it’s definitely driven by millennials. They are taking the lead on this since they’re in a much better place economically now than ever before. Many have gained new or higher paying jobs which allows them to spend more on others but never forgetting about themselves along the way, especially when retailers are offering some great deals on gifts that target this specific segment.

For the holiday season, consumers will visit three destinations: department stores, online, and discount stores. Of course, it’s no surprise that online shopping continues to see growth during the holidays. Per our survey results, online shopping is at its highest ever at 57 percent. That’s up 7.5 percent when compared to 2015. Thanksgiving weekend, which includes Thanksgiving, Black Friday, Small Business Saturday, saw more than 154 million consumers. That number, again, is up from last year’s 151 million. Over Thanksgiving weekend, the average person spent about $290, slightly down to the year before, which was $299. We believe that’s a direct result of the great promotions and deep discounts that retailers offered. Consumers can now spend less and get more. In fact, 36 percent of shoppers said that 100 percent of their purchases were bought on sale. When we compare that number to last year, that was only 32 percent of shoppers.

Leading into Black Friday weekend, we – one of the things that we definitely noticed is that Black Friday is alive and very well. It remained the most popular day to shop with 74 percent of consumers shopping online and 75 percent in store, both up slightly from last year. And just a reminder: When you’re reporting this data, there are people who shopped both online and in store and are represented in both of these numbers. Some of the most popular gift items purchased over Thanksgiving weekend included apparels and accessory, toys, and electronics. However, some of the most popular gifts consumers are hoping they receive over the holidays include not only apparel and clothing, but as well as gift cards, video games, toys, food or candy, and consumer electronics. Gift cards continue to grow year over year with the total spending on gift cards expected to reach $27.5 billion this year. That number is up compared to last year at 26 billion. Some of the top gift cards that will be purchased this season include restaurants, department store, Visa, Mastercard, American Express, coffee shops, and entertainment.

One of our last consumer surveys – we learned that some of the top toys of the holiday season include Barbie, traditional dolls, Shopkins, Hatchimals, and Lego – and that’s for little girls. And for boys, we learned that they would like to receive Legos, cars and trucks, video games, Hot Wheels, and Star Wars as their favorite toys for the season.

Our last round of holiday consumer research will actually be released in a couple of days. This survey will include information surrounding what’s left to shop, when will consumers shop and where, and as well as some special insights surrounding Super Saturday, which is coming up this upcoming Saturday. If you don’t know what Super Saturday is, it’s the last Saturday before Christmas weekend where consumers tend to shop and pick up all the last-minute gifts that they need so they’re ready to go and enjoy the holidays.

To receive any of our releases, I would definitely encourage you to visit, or you can email myself or the media relations team at NRF, and the email address is

Shana, let’s open up the line for any questions that folks might have.

MS KIERAN: Absolutely. Yes, let’s turn it over to you all for questions. And our moderator will tell you how to queue up.

OPERATOR: Thank you, ladies. Ladies and gentlemen, once again, if you do have a question or a comment for today’s conference, please press * then 0 at this time. An operator will then – you’ll hear an acknowledgment tone, and an operator will then take your name and further instruct you. If you are using a speakerphone today, please pick up the handset before pressing the numbers. Once again, if you do have a question or a comment for today’s conference, please press * then 0 at this time.

One moment while our questions are queueing up.

And we do show that there are a couple questions in queue at this time. Bear with us while we collect their information.

And ladies and gentlemen, once again, if you do have a question or a comment, please press * then 0 at this time.

And our first question comes from the line of Maho Kawachi. Please go ahead.

QUESTION: Hi, Ana. Good afternoon. This is Maho Kawachi with NIKKEI. Thank you so much for taking my call. I have two questions. One is: Before the election, people are sort of reluctant to spend. So do you see any change after these elections? And then the second question is: After this outcome of the election, the stock market is really skyrocketing. Does it impact on this Christmas season at this point?

MS SMITH: Sure. So for your first question, while we saw some uncertainty prior to the election, with – now with the results in and the television airtime previously consumed by political ads which are now freed up for retailers for holiday advertising, shoppers definitely have pulled themselves out of the election doldrums and have started shopping more online and into stores. So we definitely noted from some of our members that there was a big pickup, right after the president was announced, of sales both online and in-store, and that has continued since.

When – your question in regards to the stock market and how we’ll see that for – or how it impacts the holiday shopping season, there – of course there is some correlation there, but at this moment we’re seeing again it’s – everything is turning out to be pretty positive. We definitely expect that more and more consumers are going to continue on shopping. They more than likely have already finished their shopping. If not, they have a lot more shopping to do this weekend. And we’ll see that trend continue on. If we relate that overall, we think that it’s definitely consumers being a little bit more relieved that a decision was made, that a president was announced, and that they’re now getting pushed with a lot more ads with promotions and deals, and it’s allowing them to then feel encouraged to shop a little bit more, especially since a lot of consumers right now are so very happy with the state of the economy and with, two, how they are set financially right at this moment.

QUESTION: Thank you very much, Ana.

MS SMITH: You’re welcome.

OPERATOR: And ladies and gentlemen, once again, if you do have a question for today’s conference, please press * then 0 at this time. If you have already given your information to an operator, please press * then 1.

And Ms. Kieran, we are showing that no other questions are queueing up at this time. Please continue.

MS KIERAN: Sure. If – well, we’ll wait a – if there are no further questions at this time, I’ll let Ana make any additional remarks that she’d like to, and otherwise we can wrap up. The transcript will be made available shortly after the engagement. Ana, do you have any additions, final thoughts?

MS SMITH: I think as a final thought right now, we are just very excited that the numbers continue on showing that consumers are happy, that they’re shopping, and that they’re supporting their local retailers. And we expect that those numbers are going to keep on growing over the next couple weeks, and we hope that it will be reflected in next month’s retail sales, which covers the month of December sales. So if anybody is looking for more information in regards to the work that National Retail Federation does and as well as some of our consumer spending survey results, feel free to visit our website at, and you’ll be able to learn more about us there as well as some of our other interesting things that we support throughout the entire year.

MS KIERAN: Wonderful, thank you very much. Moderator, do we have any additional questions before we formally wrap it up?

OPERATOR: We did have one more question queue up at this time. I just have to have someone go in and collect their information so we can verify which line is dialing in. Please pardon me while I get that information together, okay?

MS KIERAN: All right.

OPERATOR: Thank you. One moment.

And we’re getting the information. Pardon me real quick.

QUESTION: Hi. I’m the one asking --

MS KIERAN: We’ve actually got Kemi right here to ask a question. Here.

QUESTION: Can you hear me? Hello?

MS SMITH: Hello?

QUESTION: Oh, hi. How are you? Thank you for doing this call. My question is in regards to the trend. Can you be – can you give us a specific on which of the trends are you seeing this holiday?

MS SMITH: There’s a few trends that we’re seeing this holiday season. We’re noticing that millennials are definitely the ones that are driving, as I mentioned before, this whole “buy one for you, two for me” concept. We’re also noticing that retailers have been really just heavily doing some crazy promotions. They even started doing Black Friday promotions as early as November 1st, they started doing Cyber Monday promotions and deals as early as Black Friday, and we’ve already started seeing them do special Super Saturday promotions throughout this entire week leading into Saturday. So we’re noticing that retailers are being aggressive with their promotions, which they really have been throughout the entire year, but a lot more right now for the holidays. They’re really trying to make sure that they get rid of all this holiday inventory and moving product as quickly as possible. And consumers are responding to that.

Another trend that we’re seeing with retailers right now is the combination of interactive opportunities in-store. Some retailers, like Best Buy and Walmart, they’re offering the chance for you to try on the new virtual reality headset and play with it for a while, just so you could get acquainted with the product. This is something that not a lot of retailers have been doing throughout the year and we’re seeing that it’s becoming very popular with these stores for the holiday season.

QUESTION: Thanks. So in terms of – if you compare this – the trends from this year to all the previous year, what difference are you seeing?

MS SMITH: I think the biggest trend difference between last year and this year is starting Black Friday promotions on November 1st. In fact, it’s actually coined as “Black November” now. And we didn’t really see those type of promotions last year and we definitely saw them a lot more this year. So that I would say is the biggest change year over year for the holidays and retailers.

QUESTION: So why do you think there is that change from last year to this year?

MS SMITH: One of the things that we believe why retailers are being aggressive is that there’s a lot of inventory right now in their stores. They are – and they’re trying to move the product. Also they’re – they want to take advantage of the opportunity to be part of this $656 billion that we’re expecting consumers to spend this holiday season.

So with that said, they’re getting creative, they’re offering some really strong promotions, they want to move the products off the shelf, they want to make the consumers happy. We also have to remember that since the recession, consumers have been already trained to purchase only items that are on sale, because that’s what they only – that’s what they could afford in the recession. However, although they’re making more money now, they’re so used to only buying things on sale that that’s still what we’re seeing right now. And therefore, retailers are reacting towards that trend by giving them still these really heavy promotional deals as – and as early as possible. Also because consumers are asking for it – we’re seeing in some of our consumer research surveys that folks have been shopping for the holidays as early as August, with the majority of them starting the heavy lifting of their holiday shopping season in November.

QUESTION: Thanks. I know, like, you answered a question regarding the election and just now you mentioned that there is a lot of products online. So do you think that before the election, that consumers did not spend a lot of money?

MS SMITH: Yeah, one of the things that we learned – we actually did a flash poll survey in the month of October to see where consumers stand in regards to the election and shopping. One of the things that we learned is over a quarter of consumers said that the election was impacting their spending plans for the holidays. In addition, they were being more cautious with their spending due to the uncertainty of the election. Then we conducted the same flash poll right after the – a president was announced and we learned that – we learned that the majority of the consumers, about 75 percent of consumers, were already picking up and shopping online and shopping in-store to catch up with what they weren’t able to do in the month of October in regards to shopping.

We have to remember that in the month of October, normally by mid-October, we’re already seeing holiday ads; however, this year, TV, radio, as well as online ads were at a all-time level of expense. Therefore, retailers could not afford to purchase TV ads during the month of October, because they were just so, so, so expensive, that only those in the – that were in part of the political campaign were able to purchase from them. And therefore, there was no voice of the holiday season in the month of October when normally we already have started to see holiday ads by then. So that’s why we see that there was a big pickup right after the election and then now we’re continuing on seeing the trend of people catching up and trying to purchase everything that they can to make sure that all their family have a gift underneath the tree for them.

QUESTION: Okay, one other question regarding the election. Can you – I don’t know if you’ve done any survey from previous elections, so can you compare anything from 2012 or 2008? Can you provide any information, because you said the spending – consumers held on to their money during the months of, I assume, during the summer period? So can you provide any information about that if you have that?

MS SMITH: Well, we actually don’t, because as we all know this election season was historical for a variety of reasons, one of them being that it was excessive negativity, there was polarization, there was lack of policy prescriptions. It just created an environment that we have never seen before in a presidential election cycle. Therefore, in the past, we have never had to do additional insight with the consumers to see where their minds were at surrounding shopping for the holidays compared to the impact of the election.

So with it being that this is – again, this was a very unprecedented election season, it was definitely very unprecedented for us to do more insights and to do this flash poll. In previous elections we’ve never seen consumers be slightly impacted in their spending plans in our surveys compared to this time. So there’s a first time for everything, and that’s something that we definitely learned this year.

QUESTION: Thank you.

MS SMITH: You’re welcome.

MS KIERAN: Do we have any additional questions at this time?

OPERATOR: No ma’am, there are no other questions that have cued up. Please continue.

MS KIERAN: So with that, thank you very much to Ms. Ana Serafin Smith. This has been very useful. We will make the transcript available to all who are on the line shortly, and thank you very, very much.

MS SMITH: You’re welcome. Thank you.