CBRE: Holiday sales could soar as much as 10.5% over 2020

Global real estate services company CBRE expects a 10-year-high 8% rise in brick-and-mortar sales this holiday season, a boost that could result in a rise of between 7% and 10.5% in total retail sales.

E-commerce sales, predicts the company, will eclipse physical store sales on a percentage basis, rising 10% to 15% over the segment’s record performance that was ignited by the pandemic in 2020. Online purchases should make up approximately 20% of total holiday sales in 2021, CBRE indicated in a new report titled “Despite Challenges, Retailers poised for Strong Holiday Season.”

It pegs an average spend per consumer of $998--the same as last year, but 5% off the $1,048 per capita expenditure in 2019.

“We expect great things this holiday season, though there will definitely be some challenges,” said Brand Isner, CBRE’s head of retail research for the Americas. “Labor issues are one. Supply chain issues are big. But we expect those challenges will be overcome and we’ll have an amazing holiday season.”

Retailers’ inventory-to-sales ratios, which averaged 1.47 pre-COVID, slipped precipitously to 1.08 in the second quarter before. The average scaled upwards to 1.10 in August, however. The lower the ratio number, the less inventory retailers have to fill orders.

“Retailers are doing a lot of inventory building,” Isner said. “Some are getting their own ships to bypass congestion, so people will still find things on the shelves, though harder-to-get items might sell out early.

The CBRE report noted that many retailers have been encouraging shoppers to shop earlier, promoting September as “the new December.

The favored Christmas shopping channel will continue to be online. Fifty-seven percent of consumers said they’d make holiday purchases there, according to the National Retail Federation, though that’s a slip from 60% last year. Department and discount stores were the next most popular shopping destinations.

Gadgets, books and videos will be popular this year, and CBRE executive VP Annette Healey made a bet on gift cards selling out.

“They’ll be hot because of the supply chain issues,” she said. ”It’s a great gift to get to have something fun to look forward to when the supply chain is fixed.”