NRF: Holiday Sales Will Grow Between 3.6% and 5.2%
The National Retail Federation (NRF) yesterday forecasted that holiday sales during November and December will increase between 3.6 percent and 5.2 percent over 2019 to between $755.3 billion and $766.7 billion. The numbers, which exclude automobile dealers, gasoline stations and restaurants, compare with a 4 percent increase to $729.1 billion last year and an average holiday sales increase of 3.5 percent over the past five years.
“We know this holiday season will be unlike any other, and retailers have planned ahead by investing billions to ensure the health and safety of their employees and customers,” NRF President and CEO Matthew Shay said in a statement. “Consumers have shown they're excited about the holidays and are willing to spend on gifts that lift the spirits of family and friends after such a challenging year. We expect a strong finish to the holiday season.”
NRF expects that online and other non-store sales, which are included in the total, will increase between 20 percent and 30 percent to between $202.5 billion and $218.4 billion, up from $168.7 billion last year.
Total Retail's Take: What's fueling the NRF's reasonably positive holiday forecast? NRF Chief Economist Jack Kleinhenz said households have strong balance sheets supported by a strong stock market, rising home values, and savings boosted by government stimulus payments issued earlier this year. Jobs and wages are also 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.
“After all they’ve been through, we think there’s going to be a psychological factor that they owe it to themselves and their families to have a better-than-normal holiday," Kleinhenz said in a statement. "There are risks to the economy if the COVID-19 virus continues to spread, but as long as consumers remain confident and upbeat, they will spend for the holiday season.”
The forecast comes as NRF’s latest research shows 42 percent of consumers started their holiday shopping earlier than usual this year. NRF’s “New Holiday Traditions” campaign has urged consumers to shop safe and shop early amidst the pandemic. Consumers seem to be listening. Fifty-nine percent of consumers reported that they had begun their holiday shopping by early November.