Despite COVID-19 economic uncertainty, holiday retail sales are expected to increase to a new record high this year, according to a forecast from the National Retail Federation (NRF) released Monday. This comes after other holiday shopping surveys have found that consumers actually plan to spend less this year than in past years.
U.S. consumers are expected to spend between $755.3 billion and $766.7 billion on holiday shopping in November and December, the NRF predicts, which would be the largest total expenditure on record. The predictions represent an increase between 3.6% and 5.2% compared to 2019. Data from the NRF shows that over the past five years, the average annual increase in holiday sales has been 3.5%.
Online and non-store sales, which are included in the total, are expected to increase between 20% and 30% this year compared to 2019. The NRF credits the overall increase to retailers’ ability to pivot during difficult times and inspire consumer confidence. E-commerce sales increased by 36.7% during the third quarter, with brick-and-mortar retailers becoming major players online, the NRF said in a press release.
"If there’s one thing that we have learned this year, and we’ve seen again and again and again, it’s that retailers will constantly evolve and adapt to meet consumer demand,” NRF president and CEO Matthew Shay said during a phone press conference Monday. “There are myriad examples of innovation… to continue to safely serve customers and communities, to the enhancements, to the supply chain, to fulfillment, to digital engagement.”
The NRF’s predictions were also fueled by optimistic metrics early in the year. Retail sales were already up by 6.4% in the first 10 months of the year compared to 2019. In an earlier survey this month, the NRF found that 42% of shoppers started their holiday shopping earlier this year than they typically do. Consumers also showed up in strong numbers for other holidays this year, including Mother’s Day, Memorial Day, and Halloween, Shay said during the press conference.
“We've seen consumers very, very engaged, looking for opportunities to celebrate, and they’ve moved into real consumption mode around the holidays,” Shay said. “So we think that’s a good indicator of the behavior we’ll see this year.”