The National Retail Federation (NRF) predicts the upward momentum the retail industry has experienced since May 2020 will continue into the 2021 holiday shopping season. The Washington, D.C.–based trade organization said today that holiday retail sales will increase between 8.5 and 10.5%, to $843.4 billion and $859 billion in sales, between Nov. 1 and Dec. 31.
The numbers, which exclude predicted sales from automobile dealers, gasoline stations, and restaurants, are comparable to those of a previous high in 2020, which saw an 8.2% increase in sales, to $777.3 billion. The trade organization said that the retail industry has seen an average increase of 4.4% in sales over the past five years.
The NRF also noted that online and other non-store sales, which are included in the total, will increase between 11 and 15% to a total of between $218.3 billion and $226.2 billion. That number is up from $196.7 billion in 2020.
In a media conference call, NRF president and CEO Matthew Shay said retailers have been showing remarkable resilience over the past two years. Moreover, consumers are also in strong financial shape coming into this key shopping season.
“We are predicting the highest holiday retail sales season on record,” Shay said. “We have a great deal of confidence that consumers will continue to power the economy in the last quarter.”
Shay said he believes all retail categories, including apparel and accessories, will “perform extremely well,” like they have so far in 2021. However, the NRF does not break out individual categories, such as jewelry, in its forecasts.
Shay noted that some external factors will continue to challenge retailers, including supply chain disruptions, labor shortages, rising inflation, and pandemic and response measures such as local and nationwide vaccination rates.
Still, consumers have proven buoyant and have shopped consistently since coronavirus quarantines largely ended, Shay said. “Retail sales have grown since May 2020 month over month [and] momentum has continued,” Shay said.
NRF found that retail sales increased 14.5% year over year for the first nine months of 2021. With the inclusion of the nearly 7% increase for 2020, that creates a “two-year stack of above 20% growth, which is remarkable that the retail industry has managed through that against an unpredictable pandemic,” Shay added.
Shay also said consumers will likely not be deterred by shortages or supply issues during this holiday. While there are some delays on the side of retailers, consumers have received enough information or even warnings about supply chain challenges to be able to switch items or try something else in lieu of goods that may not be in stock when they shop in stores or online.
As always, retailers may want to consider the sensitivity of some consumers to pricing. These shoppers may continue to look for promotions and sales prices when appropriate, Shay said. But many are willing to try new brands and experiences if they cannot find exactly what they want—they have money in their savings accounts and are willing to spend on gifts and other goods.
“One way or another, they will shop and find an item,” Shay said. “Hopefully, many will start early and have a game plan to get what they want.”
As for hiring, the NRF said it predicts retailers will bring in between 500,000 and 665,000 seasonal workers for holiday 2021. That is up from 486,000 seasonal hires last year. NRF officials said some of that hiring may have already happened this month, mostly because retailers hoped consumers would shop earlier to avoid inventory shortages and possible shipping delays.
The NRF also said it believes the weather will be a positive factor for consumers this year. Because snowy forecasts and other weather-related issues can cause shoppers to stay home, the NRF keeps an eye on weather indicators. This year, 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. In the past, such conditions have resulted in stronger retail sales, the NRF said.
Top: Holiday shopping is expected to build on the past year’s momentum and go bigger than ever, the National Retail Federation said Wednesday. (Photo: Getty Images)
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