The National Retail Federation forecasts that retail sales in November and December will grow 4.2 percent over 2025, reaching total spending of 1.013 trillion dollars, the first time the holiday season has crossed the trillion-dollar line. The headline number looks strong. The detail that matters is buried one layer down: roughly half of that 4.2 percent comes from inflation rather than from consumers buying more. NRF chief economist Mark Mathews made that split explicit on the forecast call, and it changes how the season should be planned.
Three Numbers That Do Not Agree
The first number is the NRF forecast: 4.2 percent growth to 1.013 trillion dollars, covering November 1 through December 31 and excluding gas stations, automobile dealers and restaurants. The second is the inflation contribution, which NRF pegs at about half the gain, with higher diesel prices and increased memory prices pressuring popular gifting categories such as electronics.
The third is consumer intent. Circana’s survey of more than 3,500 shoppers found holiday budgets expected at 779 dollars, down from 796 dollars in 2025, with fourth-quarter spend ranging from a 1 percent decline to a 2.5 percent increase. Simon-Kucher, surveying 1,500 adults, projects a 5.5 percent year-over-year decline in spend. A forecast built on nominal growth and a survey built on stated budgets are measuring different things, and the gap between them is the planning risk.
Why Nominal Growth Can Coexist With Thinner Baskets
Nominal growth counts dollars, not decisions. If a shopper buys the same number of gifts at higher prices, sales rise and the basket does not. Retailers then see growth in revenue alongside flat or declining units, which makes inventory planning harder because the usual relationship between revenue and units breaks down. The practical consequence is that unit forecasts need to be built separately from revenue forecasts this year.
The Hiring Signal Is the Cleaner One
NRF’s forecast also points to muted seasonal hiring, which Mathews described as consistent with a low hire, low fire environment. For context, the trade group predicted 265,000 to 365,000 seasonal workers in 2025, down from 442,000 hired in 2024. Hiring plans are a better read on retailer confidence than sales forecasts, because they are commitments with a cost attached rather than projections.
Muted hiring has an operational consequence that shows up in December. Fewer seasonal staff means less capacity for replenishment, fitting rooms and returns, which pushes wait times up precisely when tolerance is lowest. Retailers that under-hire usually compensate with overtime, and overtime is more expensive per hour than seasonal labor, so the savings are partly illusory.
Where the Labor Hours Should Go
If headcount is fixed, the allocation matters more than the total. The highest-return hours in a holiday store are not at the register, they are at replenishment and online order picking, because those two activities determine whether a shopper finds the item at all. Shifting hours from checkout to the back room is unglamorous and usually effective.
Promotional Depth Will Decide the Season
With roughly half the growth coming from price, the promotional calendar carries more weight than usual. Retailers that plan discounts on the assumption of unit growth will over-invest; those that plan on the assumption of price-led growth will protect margin by narrowing discounts to categories where price elasticity is proven.
The electronics category is the clearest example. Memory prices have risen, which raises the cost of the most popular gift items. A retailer that holds price to protect traffic loses margin on every unit; one that passes cost through risks losing the gift purchase entirely. The workable middle is to hold price on the entry configuration and let the higher-capacity model carry the margin.
What the 1.013 Trillion Figure Should Change
It should change the timing of commitments, not the size of them. If growth is price-led, then the risk is holding inventory bought at pre-season costs that later has to be marked down. Committing later and accepting a higher unit cost is often cheaper than committing early and carrying markdown risk, particularly in categories with short fashion cycles.
It should also change the measurement. Retailers that track only revenue will read this season as healthy. Those that track units, average selling price and markdown rate alongside revenue will see which part of the growth is real. The 4.2 percent is a reasonable forecast; the useful question is how much of it survives into gross profit.
What Retailers Should Lock Before November
The first thing to lock is the unit plan, not the revenue plan. If half the growth is price, then a revenue target of plus 4.2 percent can be met with flat units, which means inventory bought to support unit growth will end up as markdown. Building the buy plan on units and letting revenue float is the more defensive posture this year.
The second thing to lock is the markdown calendar. Retailers that schedule markdowns in advance, with pre-agreed triggers, avoid the panic discounting that appears in the second week of December when sales run below plan. Pre-agreed triggers also make it easier to hold price early, because the team knows there is a plan for later rather than a hope.
The Unit-Level Plan
A unit-level plan requires category managers to commit to a number of units rather than a value, which is uncomfortable because it exposes assumptions. That discomfort is the point. A revenue plan can hide a wrong assumption for a full quarter; a unit plan surfaces it within three weeks, when there is still time to react.
