With the holiday shopping season quickly approaching, inflation and interest rates have caused Massachusetts consumers to be more cautious with their spending so far this year, according to Jon Hurst, president of the Retailers Association of Massachusetts.

Hurst admitted that 2023 has been a bit of a struggle for retailers across the state, especially following a few solid years of growth post the coronavirus-plagued 2020. While many members have reported overall increases, he said, inflation rates have skewed the numbers slightly.

“That typically translates into similar numbers of transitions versus the prior year,” Hurst told the Herald. “The overall sales may be up a little bit, but it’s because the prices are up.”

Statistics from the U.S. Bureau of Labor indicate that the average rate of inflation in the Boston area has increased by 0.7% over the past two months and 2.6% since last year. Interest rates in Massachusetts continue to hover around 7.5%, with national averages for a 30-year fixed mortgage hitting 8% for the first time since the turn of the millennium.

Hurst said more local reports and figures will be coming out from members later this coming week, but national projections anticipate an overall 3-4% increase in retail spending come this holiday season. The increase, he said, would be on par for year-over-year growth.

Inflation rates, he said, must be taken into account for those projections as well. How brick-and-mortar stacks up against internet sales on a national and local level, he said, remains a bit murky.

“There’s no question that Internet continues to grow faster than brick-and-mortar, which more and more helps independents but it certainly helps, disproportionately, the larger sellers,” Hurst said.

After a down year of retail sales in 2020 due to the pandemic and restrictions when trekking outside of the home, all of which made consumers feel unsafe shopping. The 2021 and 2022 years saw increased internet sales go from double-digit growth back to single-digit.

Hurst said the pandemic forced the brick-and-mortar and small businesses to adapt by creating more of an online presence, causing an uptick in mobile apps and internet sales, which he believes will only continue to grow in the coming months and years.

Aside from finding new ways to conduct business, the pandemic was a learning experience for retailers, Hurst said. Knowing more about current and potential customers helped retailers know how their shelves should be stocked.

“I think a lot of stores of all sizes were a little bit more responsive to how customers were looking for things and, because margins were tight, inventories were not as high,” Hurst said. “The amount of inventory in stores may remain a little bit lower than what it used to be a decade ago, but even if you’re purchasing in the store you may be reserving it and having a pick up scheduled through a mobile app.”

Hurst acknowledged the question retailers and consumers have been grappling with, which is what is the future of retail with looming concerns of a recession? If inflation continues to settle down and interest rates somewhat decrease as well, consumer confidence will grow, and along with it, overall retail spending, he believes.

“It’s been varying a lot year by year, but I’m guessing that as long as the economy continues to grow, we will see some continued across-the-board spending as more people get back into the office, travel more and spend more on their loved ones,” he said.