NRF: Holiday sales rose better-than-expected 8.3% despite the pandemic
The nation’s consumers didn’t let the pandemic stop them from holiday shopping and gift-giving.
Retail sales during 2020 November-December holiday season rose an “unexpectedly high” 8.3% over the year-ago period to $789.4 billion, reported the National Retail Federation, exceeding the group’s own forecast which predicted an increase between 3.6% and 5.2%. The NRF numbers include online and other non-stores sales, which jumped 23.9% at $209 billion.
“Faced with rising transmission of the virus, state restrictions on retailers and heightened political and economic uncertainty, consumers chose to spend on gifts that lifted the spirits of their families and friends and provided a sense of normalcy given the challenging year,” stated Matthew Shay, NRF president and CEO.
Consumers shifted into high gear in December, giving the holiday season a strong finish that could be a good sign for the continuing recovery of the economy this year, said NRF chief economist Jack Kleinhenz. The 8.3% holiday increase was more than double the 3.5% average holiday increase during the previous five years, including the 4% gain in 2019.
“There was a massive boost to most consumer wallets this season,” Kleinhenz said. “Consumers were able to splurge on holiday gifts because of increased money in their bank accounts from the stimulus payments they received earlier in the year and the money they saved by not traveling, dining out or attending entertainment events. “
The economist acknowledged that some families are still struggling, as are some retail sectors. (Holiday sales at clothing and accessory stores were down 14% over holiday 2019.) But he said the promise of a new round of stimulus checks after a deal was struck before Christmas helped increase consumer confidence.
“Consumers were also encouraged by the news of COVID-19 vaccines becoming available, which helped offset concerns about increased infection rates and state restrictions on activity,” Kleinhenz said.
Kleinhenz said holiday-related spending picked up in the third and fourth weeks of December, after it was too late to expect delivery of online purchases by Christmas. Consumers turned to quick in-and-out trips to stores and took advantage of buy online, pick up in-store/curbside services retailers have perfected over the past several months.
NRF had forecast sales that during the 2020 holiday season – defined as November 1 through December 31 – would increase between 3.6% and 5.2% over 2019 to a total between $755.3 billion and $766.7 billion. The forecast called for online sales to increase between 20% and 30% to between $202.5 billion and $218.4 billion. The numbers exclude automobile dealers, gasoline stations and restaurants.
The holiday season saw year-over-year gains in six out of nine retail categories, led by double-digit increases for online sales, building materials stores and sporting goods stores. Specifics from key retail sectors during the November-December holiday period, all unadjusted year-over-year, include:
• Online and other non-store sales, up 23.9%;
• Building materials and garden supply stores, up 19%;
• Sporting goods stores, up 15.2%;
• Grocery and beverage stores, up 9.6%;
• Health and personal care stores, up 5.4%;
• Furniture and home furnishings stores, up 2.2%;
• General merchandise stores, down 0.1%;
• Electronics and appliance stores, down 14.4%; and
• Clothing and clothing accessory stores, down 14.9%.