This year’s holiday season could see record-breaking spending, according to the latest predictions from the National Retail Federation.
Earlier today, the NRF forecast that November and December sales will grow between 8.5% and 10.5% over 2020 to a range of $843.4 billion to $859 billion. That’s compared to 8.2% growth in 2020 and an average increase of 4.4% over the past five years.
“There is considerable momentum heading into the holiday season,” NRF President and CEO Matthew Shay said in a statement, citing rising incomes, stronger household balance sheets and retailers investing heavily to make sure they have merchandise on their shelves.
Included in the total are online sales, which are also expected to go up. NRF predicts an increase between 11% and 15% to a total of between $218.3 billion and $226.2 billion. While online sales will remain important, shoppers are expected to do more in-store buying this season compared to last year when COVID was raging.
Overall, the outlook seems very bright, even though a COVID-19 variant could potentially sidetrack the spending trajectory.
“If retailers can keep merchandise on the shelves and merchandise arrives before Christmas, it could be a stellar holiday sales season,” said NRF Chief Economist Jack Kleinhenz in a statement.
There is good news for job seekers too as retailers are expected to hire between 500,000 and 665,000 seasonal workers compared with 486,000 seasonal hires in 2020. In light of shipping delays, retailers have been encouraging early shopping and started seasonal hiring in October.
Weather could also be a factor this year, as it traditionally impacts holiday sales. The National Oceanic and Atmospheric Administration predicts cooler and wetter weather in the north and warmer and drier weather in the south. In the past, the phenomenon translated into stronger retail sales and it could be the case in 2021 as well.
NRF’s holiday forecast is based on economic modeling that considers a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit, previous retail sales and weather. NRF defines the holiday season as November 1 through December 31.
For more information, go to NRF’s Winter Holidays web page.
