While AAA released a report earlier this month that said their original estimate of 50 million fewer travellers during the Thanksgiving holiday was probably on the low side, the National Retail Federation sent out a report on Monday that said they expect retail sales to be up from last year for the holidays.
Citing a rebound in retail sales due to consumer resilience, the National Retail Federation forecasted November and December sales will increase between 3.6% and 5.2% over 2019 to a total between $755.3 billion and $766.7 billion. That forecast excludes automobile dealers, gas stations, and restaurants.
The average increase for holiday sales over the last five years has been 3.5%, according to the NRF.
“We know this holiday season will be unlike any other, and retailers have planned ahead by investing billions of dollars to ensure the health and safety of their employees and customers,” said Matthew Shay NRF president and CEO. “Consumers have shown they are excited about the holidays and are willing to spend on gifts that lift the spirits of family and friends after such a challenging year. We expect a strong finish to the holiday season, and will continue to work with municipal and state officials to keep retailers open and the economy moving forward at this critical time.”
NRF expects some of that growth to come from online and other non-store sales.
Online and other non-store sales, which are included in the total, will increase between 20 percent and 30 percent to between $202 billion and $218 billion, up from $169 billion last year, according to the NRF.
“Given the pandemic, there is uncertainty about consumers’ willingness to spend, but with the economy improving most have the ability to spend,” said Jack Kleinhenz, NRF chief economist. “Consumers have experienced a difficult year but will likely spend more than anyone would have expected just a few months ago.”
Families may be looking to end the year with a traditional holiday, according to Kleinhenz.
“After all they’ve been through, we think there’s going to be a psychological factor that they owe it to themselves and their families to have a better-than-normal holiday,” Kleinhenz said “There are risks to the economy if the virus continues to spread, but as long as consumers remain confident and upbeat, they will spend for the holiday season.”
Retail sales have seen a V-shaped recovery, growing both month-over-month and year-over-year each month since June., according to the NRF.
As calculated by NRF, sales were up 10.6 percent in October versus October 2019.
However, as a result of store shutdowns and stay-at-home orders last spring, not all retailers and categories have rebounded as quickly, including small and mid-sized retailers.
Some of that October boost in sales was early holiday shoppers, according to NRF, which launched a “New Holidays Traditions” campaign this fall to urge shoppers to shop safe and early.
However, it remains to be seen if the traditional Black Friday — the day after Thanksgiving Day — can keep its crown as the busiest shopping day of the year remains to be seen.
Despite several years of “Black Friday creep,” which saw retailers bumping up the beginning of Black Friday sales earlier in the shopping season, including a trend for more stores opening on Thanksgiving Day, Black Friday remained the busiest retail sales day of the year in 2019.
See the advertisements and inserts in today’s Transcript Bulletin for local Black Friday shopping details.