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Customer Growth Partners forecasts a 2.1% increase in holiday spending this year, compared with the 3.5%-4.6% prediction from Deloitte.

2023 holiday spending could be a disappointment for retailers. Retailer research firm Customer Growth Partners (CGP) estimates holiday spending will increase by just 2.1% over 2022, to $928 billion from $909 billion the previous year. That would be the lowest holiday spending growth since 2012.

“As consumers revert to more conservative and thoughtful spending patterns, the pendulum has swung from 2021’s 13% growth to today’s anemic 2%. After two years of warp-speed growth, consumer spending on goods is easing to near-normal historic rates,” ” says Craig Johnson, CGP president.

CGP’s prediction is lower than the estimate from accounting and consulting firm Deloitte. Deloitte forecasts holiday spending to grow between 3.5% and 4.6% in 2023. 

Online holiday spending will fare better

CGP estimates ecommerce spending will grow 5.1% this year, more than double the growth rate of overall spending. That’s still below Deloitte’s estimate of 10.8% to 12.8% ecommerce growth, but it’s in line with Adobe’s 4.8% growth projection.

Inflation hits consumer spending

“The sharp deceleration in retail growth is due to stubborn inflation in many sectors, spiking interest rates, a year-over-year decline in COVID-era federal stimulus, and the ongoing rotation of consumer spending from goods to services,” Johnson says.


Student loan repayments restarting and a drop in the housing market may also have an impact, he says.

Inflation and rising costs for consumers are most likely to impact sales of discretionary items, according to the report. Big-ticket items like products from home improvements and furnishing retailers will likely feel the pinch, CGP says. That’s consistent with what many retailers said in second-quarter earnings reports, citing consumer reluctance to spend discretionary funds and turning to discount retailers.

What sectors will have the highest holiday spending?

CGP projects the health and personal care category will experience the most significant growth in spending, up 5.2% thanks to growth in the beauty market this year. Adult beverages, both alcoholic and non-alcoholic, will grow 3.1%, while apparel will grow modestly at 2.5%, CGP predicts. General merchandise sales will remain stable, with projected 1% growth.

Meanwhile, home-related retailers will likely see losses. CGP predicts sales will decrease 6% in the home furnishings category and 4% in the home improvement category. Toys and hobbies and consumer electronics will likely see more modest losses, at 2.8% and 2.5%, respectively.


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