Holiday retail sales rose a stronger-than-expected 8.3 percent from 2019, or $789.4 billion, according to data released by the National Retail Federation on Friday. Consumers apparently embraced the gift-giving season as a way to cheer themselves up during the pandemic. The numbers include online and other non-stores sales, which were up 23.9 percent at $209 billion. The NRF had forecast that sales during the 2020 holiday season, which it defines as Nov. 1 through Dec. 31, would increase between 3.6 percent and 5.2 percent year-over-year to a total between $755.3 billion and $766.7 billion. The forecast called for online sales to increase between 20 percent and 30 percent to between $202.5 billion and $218.4 billion. The numbers exclude automobile dealers, gasoline stations and restaurants. The 8.3 percent holiday season increase was more than double the 3.5 percent average holiday increase over the previous five years, including 2019’s 4 percent gain.
NRF Chief Economist Jack Kleinhenz said consumers shifted into high gear in December, giving the 2020 holiday season a strong finish that could be a good sign for the recovery of the economy this year.
“There was a massive boost to most consumer wallets this season,” Kleinhenz said in a statement. “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."
Kleinhenz also said holiday-related spending picked up in the third and fourth weeks of December, after it was too late to expect delivery of online purchases by Christmas. Consumers turned to quick in-and-out trips to stores and took advantage of buy online, pick up in-store/curbside services retailers have rolled out over the past several months.
Total Retail's Take: This news is certainly welcomed after a difficult period for retailers. It shows that despite the economic challenges of the coronavirus pandemic, consumers still chose to shop. “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 President and CEO Matthew Shay said.
Furthermore, Shay is predicting that the good news will continue as a result of President-elect Biden’s stimulus proposal, which includes "direct payments to families and individuals, further aid for small businesses, and tools to keep businesses open.”
Indeed, President-elect Biden said Friday he's assembling a multitrillion-dollar relief package that would boost stimulus payments for Americans to $2,000, extend unemployment insurance, and send billions of dollars in aid to city and state governments, according to The Washington Post. The package will also include billions of dollars to improve vaccine distribution and tens of millions of dollars for schools, as well as rent forbearance and assistance to small businesses, especially those in low-income communities.