The National Retail Federation, the nation’s largest retail group, expects higher holiday sales to break last year’s record season, even as a booming global supply chain slows down the flow of goods and causes prices to increase for a wide range of items.
The trade group said on Wednesday that it expects sales for the period of November and December to increase between 8.5% and 10.5% to reach $ 843.4 billion and $ 859 billion. Holiday sales rose 8.2% in 2020 from a year earlier, when shoppers, stranded at the start of the pandemic, splurged on pajamas and home items, mostly online.
The group expects online and other non-store sales, which are included in the total, to rise 11% to 15% to a total of between $ 218.3 billion and $ 226.2 billion. through online shopping.
Figures exclude billion car dealers, gas stations and restaurants. Holiday sales have grown an average of 4.4% over the past five years, according to the group.
The forecast takes into account a variety of metrics including jobs, wages, consumer confidence, disposable income, consumer credit, previous retail sales and weather.
“There is tremendous momentum as the holiday shopping season approaches,” said NRF President and CEO Matthew Shay. “Consumers are in a very favorable position at the start of the final months of the year as incomes rise and household balance sheets have never been so strong.”
Shay also noted in a media call on Wednesday that lifting U.S. restrictions on international visitors from more than 30 countries early next month should also give retailers a boost this holiday season.
According to Deloitte, MastercardSpending Pulse and KPMG, the NRF’s bullish forecast is similar to other forecasts, which forecast holiday sales to increase by at least 7%.
Yet NRF executives acknowledged on the call that there are many headwinds facing consumers who are facing the ripple effects of a congested supply chain that has resulted in higher prices. , less generous discounts and shortages of items.
For example, online prices have gone up 3% as the holidays approach; in contrast, that number, on average, has fallen 5% in recent years, according to the Adobe Digital Economy Index, which tracks more than one trillion visits to retail sites in the United States. Adobe predicts discounts will be in the range of 5-25% across all categories this season, compared to a historical average of 10-30%.
Much like last year, shoppers shop early for the holiday season for fear of not getting what they want. But Shay said retailers do a good job making sure inventory is on the shelves, although there are gaps in some categories. Still, he’s seen shoppers learn to adapt by switching to other brands and items if they can’t find their first choice. This happened at the start of the pandemic, when customers searched for alternative consumer brands when they couldn’t find their first choice.
“The consumer will not be deterred,” Shay said. “They will be going out shopping for the holidays and not coming home empty-handed. “