The NRF’s president believes that moving forward consumers will continue seeking value and will be deliberate in their spending. Credit: Getty Images.

NRF President and CEO Matthew Shay highlighted the 2023 US retail holiday season reflected a more sustainable rate of growth than seen during the pandemic years.

He suggested this growth mirrors retailers adapting to the increasing expectations of consumers for both value as well as seamless experiences across digital and physical stores. It also demonstrates the underlying strength of the economy.

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He explained: “For all the talk of consumer sentiment, I think the things that really drive consumer spending are the unemployment rate and wage growth. And right now, the unemployment rate is very low. Wage growth remains steady, although it’s moderated a bit, but it’s still running in excess of inflation, and consumers vote based on whether or not they have jobs, whether or not they’re making money.”

According to Shay, the future ahead will also depend on “how good of a balancing act” the Federal Reserve can do with interest rates, and other external factors such as global geopolitical conflict and challenging elections in the United States.

He pointed out that his recent conversations with retail CEOs indicate customer expectations have risen.

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Shay is of the view that moving ahead, consumers will continue seeking value, as well as being deliberate in their spending.

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He continued: “I think in the coming year, there’s a recognition that there will be a premium on execution, and those that execute at a high level will be successful. Those that don’t, maybe won’t be able to keep up with the dynamism in the industry.”

Last week, NRF’s chief economist Jack Kleinhenz warned that tighter credit conditions and escalating borrowing costs may dampen US consumer spending in 2024.

Kleinhenz pointed out that contrary to earlier predictions of a looming recession, consumers maintained their spending momentum and defied economic headwinds.