Holiday spending predicted to grow only two percent

According to The Alabama Retail Association, Alabamians spent 2.8 percent more during November and December 2023 than they did during the same period in 2022. For all of 2023, Alabama retail sales grew 3.42 percent. This year, spending is expected to be the same as 2023, or maybe slightly better.

For the first eight months of 2024, taxed sales in Alabama declined slightly more than a half percent compared with January to August 2023, based on Alabama Revenue Department abstracts. A one percent reduction in the tax rate on food starting September 2023 accounts for that slight year-over-year decline in sales tax collections. That puts overall sales about level with 2023.

An even growth rate in the traditional holiday spending months would equate to $18.5 billion being spent in the state during those two months.

Alabama Retail Association’s holiday spending prediction covers all taxed sales, including those from remote sellers, during the months of November and December.

The National Retail Federation (NRF) expects winter holiday spending to grow between 2.5 percent and 3.5 percent nationally over 2023.

NRF’s calculation excludes automobile, gasoline and restaurant food sales, while the Alabama Retail Association’s projection excludes only gasoline sales.

For the past five holiday seasons in Alabama, sales have grown an average of seven percent each year. From 2019 to 2023, sales in the final two months of the year grew almost 40 percent. Throughout that period, consumer spending remained resilient through the pandemic, inflation and political conflicts.

The Alabama Retail Association is continuing its #ShopAlabama campaign and encourages consumers to shop with local retailers in their communities.

“The stores down the street or around the corner support your community in big and small ways daily,” said Alabama Retail Association President Rick Brown. “By shopping with retailers based in your community or our state, you contribute to the health of your local and state economies.”

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