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The National Retail Federation projects U.S. sales will top $1 trillion this holiday season, even as in-person shopping trends downward.

While brick-and-mortar stores remain central to the holiday season, it’s no secret that shopping has steadily shifted online — a trend the pandemic only accelerated.

Half a decade later, with tariffs, inflation and a recent government shutdown driving up prices, some studies suggest holiday shoppers may tighten their budgets and skip the stores this Black Friday.

Still, Austin-area retailers and shopping districts like The Domain and Barton Creek Square are readying for holiday shopping with the belief that many shoppers still value in-person experiences.

“Even with the plethora of online shopping options, customers still love the experience of in-person shopping,” said Monica Esparza, a spokesperson for The Domain. “There’s something nostalgic about touching and feeling a purchase before walking out of the store with shopping bags.”

The holiday season includes some of the year’s biggest shopping days — Black Friday, Small Business Saturday, Cyber Monday and the week of Christmas. Together, they account for a significant share of many major retailers’ annual revenue.

And although surveys are projecting the growth of retail sales to slow this season due to economic pressures, the National Retail Federation is still expecting holiday sales in the U.S. to surpass $1 trillion for the first time.

Last year’s holiday sales rose 4.3% from the year prior to $976.1 billion.

“American consumers may be cautious in sentiment, yet remain fundamentally strong and continue to drive U.S. economic activity,” federation President and CEO Matthew Shay said in a statement about the projections. “We remain bullish about the holiday shopping season and expect that consumers will continue to seek savings in nonessential categories to be able to spend on gifts for loved ones.”

His organization’s forecast noted that even as U.S. holiday sales are expected to top $1 trillion, retailers will likely hire fewer seasonal workers, signaling a continued shift toward online shopping. The federation projects between 265,000 and 365,000 seasonal hires this year, down from 442,000 last year.

Its projections of a profitable holiday season came as Deloitte projected a 4% dip in sales for this year’s Black Friday through Cyber Monday shopping events.

The Austin Chamber of Commerce is seeing the same trend.

“Consumer spending is holding pretty consistent,” said Jeremy Martin, president and CEO of the Austin chamber. “But consumer sentiment is lagging and I would expect that to show up in holiday spending.”

But even with the possibility of slower in-person shopping this weekend, Austin-area shopping districts are readying for the season.

Ward Kampf, president of Northwood Retail, which owns and operates Domain Northside — a separate entity from its neighbor The Domain — said he thinks shoppers will be more conscientious about spending but isn’t concerned about dwindling in-person traffic.

Kampf said about 18% of annual sales at Domain Northside are made in November and December. A lot of the shopping district’s busiest times are outside of the holiday months, thanks to events like the South by Southwest Conference and Festivals, Formula 1 U.S. Grand Prix and Austin City Limits Fest bringing more tourists to the area.

The big thing for retailers this season, Kampf said, is innovation and “newness.”

“People are more prudent in what they spend on these days,” Kampf said. “People generally want to spend on what’s new, so innovation is so important right now. The people that are price conscious will shop online, but the retailers that know their customers and clientele are having the biggest successes. The in-store events and promotions on what’s new are drawing people to the store.”

Barton Creek Square Mall and The Domain, both of which are operated by Simon Property Group, said they’re expecting high number of in-person shoppers this weekend.

Esparza said The Domain’s traffic has already been higher this year than last and that it’d likely accelerate into the holiday season. Barton Creek mall said the same, but both declined to give specific sales numbers or year-end estimates.

“We can’t share expected visitor numbers for Black Friday, (but) our traffic has been consistently higher than last year, and we expect to see families shopping, celebrating the season and capturing their photos with Santa,” said Jana Griswold, a spokesperson for Barton Creek.

Domain Northside, The Domain and Barton Creek Square together are home to about 400 stores and restaurants — with the majority being national department stores like Dillard’s and Nordstrom, technology retailers like Apple and Google, and nationally recognized brands like lululemon, Tecovas, Gap and J.Crew.

For some local Austin stores, this holiday season isn’t looking as hopeful.

Brandon Hodge is president of the South Congress Merchants Association and owner of two local businesses: the toy store Monkey See, Monkey Do! and the South Congress staple Big Top Candy Shop.

“We’re not incredibly excited,” he said. “We’re always excited for the holidays because, the holidays, right? But we’re not excited for or expecting a blockbuster holiday season. This whole year frankly has been down from last year, both at the toy and candy stores.”

Hodge said local stores like his are hit hardest by economic downturns and the ongoing shift toward online shopping. He also said his shop can’t match the same-day delivery promised by retailers such as Amazon and Walmart.

South Congress, Hodge said, isn’t as busy on Black Friday as people expect it to be and with the recent economic pressures on consumers, he thinks this holiday season won’t be as profitable as years past for local businesses.

“Cautiously optimistic is not even the right way to put it. We’re not bracing for the worst, but we’re just going to buckle down and serve our customers in a capacity they can afford this year,” Hodge said. “Money that is spent locally, stays local. That money goes directly to my employees, who live, breathe and work here and they spend that money here in Austin. It’s more incredibly vital to local economies in a way that I wish more people would recognize.”