Business

NRF Says Spending Will Break Records

A masked man carries shopping bags at Columbus Circle on November 28, 2020 in New York.

Noam Galay | Getty Images

According to the National Retail Federation, holiday sales could surpass even the brightest expectations of the big shopping season.

Economist at a large trading group, Jack Kleinhenz, said Friday that spending in November and December could rise 11.5% from the same period a year ago – higher than many retail analysts and NRF itself had predicted.

NRF has already called for a record vacation season, predicting at the end of October that sales will rise between 8.5% and 10.5% from last year. The group said it expects sales in November and December to hit record highs of $ 834.4 billion to $ 859 billion. The sales forecast does not include expenses at car dealerships, gas stations and restaurants.

Holiday sales were up 8.2% last year from 2019 to a record $ 777.3 billion, according to the NRF.

“People have the ability to spend, and I think they are determined to spend,” Kleinchenz said in an interview. He pointed to strong post-pandemic balances, low unemployment and a desire to get together for holiday gatherings.

Kleinchenz acknowledged uncertain factors, including how consumers will react to the omicron option and whether it could change how they shop and celebrate, or what they might buy.

“There is no crystal ball to give a definitive answer, but the latest data are encouraging and provide useful insights,” he said in a press release. “In fact, the season may be even better than we expected.”

So far, this holiday season has a different rhythm and unique challenges. Shoppers started buying gifts early due to concerns about product availability and delivery delays. Retailers have tried to keep goods moving in the face of congested ports and a shortage of truck drivers. And the inflated prices of everything from materials to fuel means that consumers find fewer deals, whether they shop online or in stores.

This drove up spending in October and early November, stealing some of the buzz from major shopping holidays like Black Friday and Cyber ​​Monday. According to the NRF, total shoppers and average spending declined over the extended Thanksgiving weekend compared to each of the past two years.

Kleinchens said shoppers will continue to spend even if they’ve already bought a lot of gifts. “If you look. If you look at what happened last November, we had early October and a very, very strong November, ”he said. “People are creatures of habit. There is still a lot of time before the holidays. “

At least some of the higher sales this season will come from inflation, which has driven prices up on many gift items, from toys to electronics. Retailers, including Macy’s and Kohl’s, have also talked about declining inventories and increasing consumer demand, which means they can sell more items at full price and little is left on the markdown counter.

During a phone call last week, NRF CEO Matt Shay said omicron could indeed boost retail sales this holiday. Instead of booking a trip or buying a gift card for the day at the spa, he said, some of that experimental spending could go back into merchandise.


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