Bain: Strong non-store, grocery sales to drive holiday growth

Retailers should expect e-commerce to deliver the most cheer this holiday season. 

Total U.S. holiday sales will increase a modest 2% year-over-year, according to the “2020 Holiday Shopping Outlook” from Bain & Company. This is less than the 10-year average year-over-year holiday sales gain of 3.5% recorded by Bain between 2010 and 2019.  

The Bain forecast is more in line with Deloitte’s annual holiday forecast, which projects year-over-year sales will edge up 1% to 1.5%, than it is with some others. Customer Growth Partners is projecting a 5.8% increase, citing strong September sales.

According to Bain, the retail categories that performed well from January through August 2020 will continue the trend during the holiday season. These include non-store (up 24% year-over-year from January – August), food & beverage stores (up 12%), building & garden stores (up 11%), and general merchandise stores (up 2%). Health & personal care stores reported flat sales.

Categories that lost sales compared to the first eight months of 2019 include sporting goods, hobby, books & music (down 1%), miscellaneous retail stores (down 4%), furniture & home stores (down 11%), electronics & appliance stores (down 17%), and clothing & accessories stores (down 35%). On average, retail sales grew 5.3% year-over-year during the period. 

Bain also surveyed consumers about their holiday shopping plans. Notable responses include:

•    47% will do most or all of their holiday shopping online.
•    46% of online holiday shoppers will be doing so for the first time.
•    37% will shift more of their holiday shopping to online with delivery.
•    23% will shift more of their holiday shopping to curbside or in-store pickup.
•    53% expect COVID-19 to have a negative impact on their finances.
•    51% plan to spend less on holiday shopping this year compared to last year.