Overall retail spending (excluding auto) is expected to grow 3.2% year-over-year this holiday season.

Inflation is cooling, but consumers will continue to expect — and demand — promotions and discounts this holiday season.

That’s one of the takeaways from Mastercard Economics Institute’s  Holiday Forecast for the 2024 season (Nov. 1 to Dec. 24), which predicts that overall retail spending (excluding automotive) will grow 3.2% year-over-year this holiday season with a 7.1% bump from online sales. The report includes sector insights from Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment key. 

The 2023 consumer concentrated spending during promotional moments last holiday season, searching for — and receiving — discounts, the report noted. Because Christmas fell on a weekend, there was some last-minute shopping and a rush of spending right into the holiday. The 2024 holiday shopper will likely be using a similar playbook as last year, making choices and looking for the best deals, but may be feeling slightly more “stretched,” according to Mastercard, but other factors will also be at play. 

The “calendar effect” is one of the key trends for retailers to watch for as the holiday shopping season approaches. With Thanksgiving (Nov. 28) falling five days later than last year, there could be some volatility with year-over-year comparisons, the report noted.

“It may also encourage retailers to start promotions earlier rather than concentrating them during the Black Friday weekend and it could push more holiday shopping into December, especially online,” the report said.

[READ MORE: Walmart starting its holiday promotions earlier than ever this year]