Retailers highly anticipate the holiday season, which retail businesses historically have relied on to generate sufficient sales to realize profits for the year. Historically, “Black Friday” and “Cyber Monday” are recognized as signaling the beginning of the holiday spending season. The additional sales and activity anticipated by businesses leads to seasonal hiring, providing opportunities for temporary employment. The Economics Center constructs an annual forecast of holiday retail spending to assist Ohio retailers with preparing for the holiday season.
The Economics Center forecasts a 0.7 percent increase in Ohio relevant retail spending for the 2023 holiday season relative to the 2022 season, with total sales of $32.2 billion.
Full-year relevant retail sales in Ohio have exhibited sustained growth over recent years. Relevant retail sales during the first half of 2021 experienced substantial growth compared to the first half of 2020, however, relevant retail sales have experienced smaller year-over-year gains since the first half of 2022.
Online shopping continues to be a growing component of retail sales, although growth is stabilizing since the COVID-19 pandemic. Growth in nonstore retail sales, which includes online and mobile shopping, exceeded overall retail sales growth in Ohio in 2022 compared to 2021.
Ohio’s labor market indicators have improved since the second half of 2020, corresponding with the COVID-19 pandemic recovery. Employment in Ohio during Q3 2023 was 2.6 percent higher than pre-pandemic levels in Q1 2020. Additionally, wages and salaries in Ohio have increased 28.1 percent between Q1 2020 and Q2 2023.
Consumer confidence has partially recovered from the COVID-19 pandemic but remains below the peak experienced in February 2020. Furthermore, consumer confidence remains 26 points below the post-pandemic peak experienced in June 2021. Consumer confidence has experienced month-over-month declines between August and October 2023.
Inflation in the Midwest has been increasing at higher rates since 2020. Inflation in the Midwest increased by 5.7 percent between September 2020 and September 2021 and increased by 8.1 percent between September 2021 and September 2022. However, inflation in the Midwest slowed to 3.2 percent between September 2022 and September 2023. To curb rising inflation, the Federal Reserve has raised interest rates 11 times since March 2022, including four interest rate hikes in 2023.
The Economics Center projects that the State’s three largest metro areas will again account for more than half (55.0%) of estimated relevant retail sales this holiday season. Economics Center forecasts indicate that seven of the nine metro areas analyzed in Ohio will experience an increase in holiday relevant retail sales in 2023 over 2022.