The National Retail Federation reports that retail sales during 2020’s November and December holiday season grew by 8.3% over the same period in 2019 to $789.4 billion, exceeding NRF’s holiday forecast despite the economic challenges created by the coronavirus pandemic.
The numbers include online and other non-stores sales, which were up 23.9% at $209 billion.
“Despite unprecedented challenges, consumers and retailers demonstrated incredible resilience this holiday season,” said NRF President Matthew Shay. “Faced with rising transmission of the virus, state restrictions on retailers and heightened political and economic uncertainty, consumers chose to spend on gifts that lifted the spirits of their families and friends and provided a sense of normalcy given the challenging year.”
NRF Chief Economist Jack Kleinhenz said consumers shifted into high gear in December, giving the holiday season a strong finish that could be a good sign for the continuing recovery of the economy this year. The 8.3% holiday season increase was more than double the 3.5% average holiday increase over the previous five years, including 2019’s 4% gain.
“There was a massive boost to most consumer wallets this season,” Kleinhenz said. “Consumers were able to splurge on holiday gifts because of increased money in their bank accounts from the stimulus payments they received earlier in the year and the money they saved by not traveling, dining out or attending entertainment events.
He added, “Some families are still struggling, as are some retail sectors. But the promise of a new round of stimulus checks after a deal was struck before Christmas helped increase consumer confidence.” Consumers also were said to be encouraged by news of Covid 19 vaccines becoming available, which helped offset concerns about increased infection rates and state restrictions on activity.
Spending picked up in the third and fourth weeks of December, too late to expect delivery of online purchases by Christmas, Kleinhenz noted. Instead, consumers turned to quick in-and-out trips to stores as well as pick up in-store/curbside services.
NRF had forecast that sales during the 2020 holiday season – defined as Nov. 1 through Dec. 31 – would increase between 3.6% and 5.2% over 2019 to a total between $755.3 billion and $766.7 billion.
NRF also forecast an online sales increase of between 20% and 30% to between $202.5 billion and $218.4 billion. The numbers exclude automobile dealers, gasoline stations and restaurants.
December retail sales were down 1.6% seasonally adjusted from November but were up 8.6% unadjusted year-over-year. That built on a year-over-year gain of 8% in November despite November’s month-over-month decline of 0.9% from October. As of December, the three-month moving average was up 8.9% over 2019.
NRF’s numbers are based on data from the U.S. Census Bureau, which reported that overall December sales – including auto dealers, gas stations and restaurants – were down 0.7% seasonally adjusted from November 2020 but up 2.9% unadjusted year-over-year.
Holiday season sales saw year-over-year gains for online sales (23.9%), building materials stores and garden supply stores (19%), and sporting goods stores (15.2%). Also up were grocery and beverage stores (9.6%), health and personal care (5.4%), and furniture and home furnishings stores (2.2%).
Declines were seen by general merchandise stores (-0.1%), electronics and appliance stores (-14.4%), and clothing and clothing accessory stores (-14.9%).
The annual Mastercard SpendingPulse survey found that sales were up by 3% for the period of Oct. 11 through Dec. 24, 2020, and by 2.4% between Nov. 1 and Dec. 24. (AA, 1-15-21, P. 3).
