Coresight: Total holiday sales to pass $1 trillion, but wildcards could impact final tally

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Coresight: Total holiday sales to pass $1 trillion, but wildcards could impact final tally

By Dan Berthiaume - 10/15/2020

Total retail sales are predicted to grow about 5% this holiday season.

According to the “Holiday 2020 U.S. Retail Outlook” from Coresight Research, total retail sales —  including brick-and-mortar, mobile and digital — between October and December will reach $1.1 trillion. This represents a roughly 5% increase from the same three-month period in 2019. (The Coresight total excludes food-services businesses, auto retailers and gasoline stations.)

The Coresight forecast also noted the existence of three “wild cards” that could have hard-to-predict impacts on 2020 holiday spending. These include potential uncertainty or dispute around the November presidential election creating a drag on consumer spending; uncertainty about another round of COVID-10 stimulus payments by yearend (which could have a positive impact on holiday spending if they take place or negative if they do not);  and lowered store capacity due to social distancing constraints reducing in-store spending totals.

As part of the overall growth, total online retail sales will increase 33.5% year over year, to about  $234 billion, according to Coresight. Online will represent 21.7% of all retail sales in the holiday quarter (versus 17.1% for holiday 2019), with e-commerce’s share of total non-food sales reaching 27.6%. 

E-commerce growth is expected to be supported by a 60-plus percent year-over-year rise in online food sales; with online food sales reaching an estimated $14 billion in the final quarter. Across nonfood retail, Coresight expects a low-30s-percentage-point rise to take total online nonfood sales to $220 billion in Q4.

Coresight analysis indicates total food retail demand will be particularly strong, potentially rising from 9-9.5% year-over-year. Other categories that have been selling well during the pandemic which may continue their performance through the holidays include discretionary sectors such as home improvement, as well as sports and leisure goods.

There is also the potential for a multibillion-dollar switch from services to products, as consumers face reduced options for spending during the ongoing COVID-19 pandemic. In last year’s fourth quarter, U.S. consumers spent over $400 billion dollars on air travel, food service, accommodation, and recreational and cultural services.

In addition, Coresight sees increasing shopper preference for premium products, as well as pent-up discretionary spending from COVID-19 totaling over $400 billion and earlier holiday shopping in October possibly generating higher momentum for November and December.

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