Holiday sales expected to grow less than 2021

The National Retail Federation expects holiday sales to grow between 6% and 8%.

• That's nowhere near last year's record of 13.5%, but it is around or slightly above the kind of year-over-year growth seen historically, according to data going back to 2002.

Why it matters: Adjusted for inflation, that projection indicates that holiday sales could be flat, or declining, though it also shows a willingness on the part of consumers to maintain their spending, says David Silverman, a retail analyst and senior director at Fitch Ratings.

Yes, but: At the beginning of the year, before inflation became a headline issue, Silverman expected holiday sales to either be flat or negative based on difficult year-over-year comparisons, given record growth in 2021 and a shift in spending towards services.

What they're saying: Luxury retailer Neiman Marcus' CEO Geoffroy van Raemdonck said at Axios' BFD Summit that he is cautiously optimistic about sales growth this holiday season.

• Bain Capital's Ryan Cotton, however, said he thinks "it's going to be a little bit of a cold winter," particularly compared to "some pretty remarkable consumption patterns over the last two years" driven by stimulus.
• "Now we're starting to see real pressures on that with inflation, with comping the stimulus dollars, with some fears of economic uncertainty and recession," the managing director said during an Axios Pro event on Oct. 31.

The bottom line: One thing industry participants largely agree on is there will be lots of discounting this holiday season.

• Expect to see higher markdowns in areas such as apparel and home furnishings than last year due to excess inventory, Silverman says.