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Holiday spending has the potential to shatter previous records, as the National Retail Federation (NRF) has forecast that holiday sales during November and December this year will grow between 8.5 per cent and 10.5 per cent over 2020 to between $843.4 billion and $859 billion. The numbers compare with a previous high of 8.2 per cent in 2020 to $777.3 billion.
NRF expects that online and other non-store sales, which are included in the total, will increase between 11 per cent and 15 per cent to a total of between $218.3 billion and $226.2 billion driven by online purchases. In comparison, that number is up from $196.7 billion in 2020, the federation said in a media release.
Last year saw extraordinary growth in digital channels as consumers turned to online shopping to meet their holiday needs during the pandemic. While e-commerce will remain important, households are also expected to shift back to in-store shopping and a more traditional holiday shopping experience.
Holiday spending has the potential to shatter previous records, as the National Retail Federation has forecast that holiday sales during November and December this year will grow between 8.5 per cent and 10.5 per cent over 2020 to between $843.4 billion and $859 billion. The numbers compare with a previous high of 8.2 per cent in 2020 to $777.3 billion.
“Pandemic-related supply chain disruptions have caused shortages of merchandise and most of this year’s inflationary pressure,” NRF chief economist Jack Kleinhenz said. “With the prospect of consumers seeking to shop early, inventories may be pulled down sooner and shortages may develop in the later weeks of the shopping season. However, if retailers can keep merchandise on the shelves and merchandise arrives before Christmas, it could be a stellar holiday sales season.”
While it appears new COVID-19 infections and hospitalisations are down, a variant surge could potentially sidetrack the current trajectory of spending. Kleinhenz said strong household fundamentals provide optimism amid the uncertainty. Income is growing from wage compensation, and household wealth has reached another record high. These together support strong spending this holiday season.
NRF expects retailers will hire between 500,000 and 665,000 seasonal workers. That compares with 486,000 seasonal hires in 2020. Some of this hiring may have been pulled into October as many retailers encouraged households to shop early to avoid a lack of inventory and shipping delays.
Weather traditionally factors into holiday sales, and the National Oceanic and Atmospheric Administration is predicting a high likelihood of a La Niña pattern of cooler and wetter weather in the north and warmer and drier weather in the south. This climate phenomenon has in the past correlated with stronger retail sales and could be a factor in 2021.
Fibre2Fashion News Desk (KD)
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