With retail sales rebounding strongly due to continued consumer resilience, the National Retail Federation today forecast that holiday sales during November and December will increase between 3.6% and 5.2% over 2019 to a total between $755.3bn and $766.7bn.
The numbers, which exclude automobile dealers, gasoline stations and restaurants, compare with a 4% increase to $729.1bn last year and an average holiday sales increase of 3.5% over the past five years.
CEO and President of the NRF, Matthew Shay, said: “We know this holiday season will be unlike any other, and retailers have planned ahead by investing billions of dollars to ensure the health and safety of their employees and customers.”
Adding: “Consumers have shown they are excited about the holidays and are willing to spend on gifts that lift the spirits of family and friends after such a challenging year. We expect a strong finish to the holiday season, and will continue to work with municipal and state officials to keep retailers open and the economy moving forward at this critical time.”
NRF expects that online and other non-store sales, which are included in the total, will increase between 20 percent and 30 percent to between $202.5bn and $218.4bn, up from $168.7bn last year.
NRF’s chief economist, Jack Kleinhenz, said: “Given the pandemic, there is uncertainty about consumers’ willingness to spend, but with the economy improving most have the ability to spend. Consumers have experienced a difficult year but will likely spend more than anyone would have expected just a few months ago.
“After all they’ve been through, we think there’s going to be a psychological factor that they owe it to themselves and their families to have a better-than-normal holiday. There are risks to the economy if the virus continues to spread, but as long as consumers remain confident and upbeat, they will spend for the holiday season.”
Kleinhenz went on to explain how households have strong balance sheets supported by a strong stock market, rising home values and record savings boosted by government stimulus payments issued earlier this year.
Jobs and wages are growing, energy costs are low and reduced spending on personal services, travel and entertainment because of the virus has freed up money for retail spending.
As a result of store shutdowns and stay-at-home orders last spring, not all retailers and categories have rebounded as quickly, including small and mid-sized retailers.
However, in the aggregate retail sales have seen a V-shaped recovery, growing both month-over-month and year-over-year each month since June. A
As calculated by NRF, sales were up 10.6% in October versus October 2019, likely driven in part by early holiday shopping.
For the first 10 months of this year, retail sales were up 6.4% versus the first 10 months of 2019.