NRF: Holiday Shopping Could Beat Forecast Despite Inflation and COVID-19
The 2021 holiday season appears to be on track to exceed the National Retail Federation’s (NRF) forecast for record spending, despite ongoing supply chain disruptions, inflation and challenges like the new COVID-19 omicron variant, NRF Chief Economist Jack Kleinhenz said on Friday. “Now that we’re in December, the holiday shopping season is nearing the finish line,” Kleinhenz said. “The question is how have factors ranging from economic indicators to the twists of the COVID-19 pandemic affected the season so far, and what role will they play in the weeks that remain? There’s no crystal ball to provide a definitive answer, but the latest data is encouraging and provides useful insights. In fact, the season could turn out even better than we expected.”
Kleinhenz’s remarks came in the December issue of NRF’s Monthly Economic Review, which reported that holiday retail sales during November and December could now grow as much as 11.5 percent over the same period in 2020. That would exceed NRF’s forecast, which was published in October and reported holiday sales would be up between 8.5 percent and 10.5 percent.
The first official holiday results won’t be known until the Census Bureau reports November sales on Dec. 15, the NRF said. However, overall consumer spending — beyond just retail sales — rose by 1.3 percent in October, the largest monthly increase since March, and “there was no evidence of a pullback” despite price increases that have come with inflation caused by supply chain disruptions and increased demand, Kleinhenz said.
Total Retail's Take: While this news is generally good, it's clear that the COVID-19 pandemic has made it very difficult to accurately forecast 2021 holiday sales. In fact, despite NRF's positive outlook, Kleinhenz did call the COVID-19 omnicrom variant "the latest wildcard raising uncertainty around the economic outlook,” but said it is too early to predict what impact it will have on the economy.