The National Retail Federation says holiday sales in November and December will rise 3.6% to 5.2% over 2019, to a total of $755.3 to $766.7 billion.
The numbers (excluding car dealers, gasoline stations and restaurants, compare with a 4% hike to $729.1 billion last year and an average holiday sales increase of 3.5% over the past five years.
“Given the pandemic, there is uncertainty about consumers’ willingness to spend, but with the economy improving most have the ability to spend,” according to NRF Chief Economist Jack Kleinhenz. “Consumers have experienced a difficult year but will likely spend more than anyone would have expected just a few months ago.”
He says 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, Kleinhenz notes.
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.
Sales were up 10.6% in October versus October 2019, driven partly by early holiday shopping. For the first 10 months of this year, retail sales were up 6.4% over the first 10 months of 2019.
Ecommerce sales up 36.7% year-over-year in the third quarter, and many households are expected to depend on digital shopping to make holiday purchases, just as they did for everyday spending this year. Online spending includes websites operated by bricks-and-mortar retailers, who are now major players in the online market.” .
