Retail sales in 2021 will increase to a record $4.26 trillion, up 8.1% year-over-year, which is the highest this century.
That’s according to Customer Growth Partners’ 2021 annual forecast, which noted that the growth was on top of 2020’s robust—“and widely unexpected”—year-over-year growth of 7.1%, which came despite last year’s spring collapse in retail spending triggered by COVID store closures.
The 8.1% increase for 2021 will mark the fastest pace this century, easily topping 2004’s annual 6.4% increase, based on data from the DOC/Census Bureau and findings from CGP’s big data platform.
“In light of COVID impacts and lingering economic uncertainty, the extraordinary year-over-year increase in holiday sales has barely let up in 2021, demonstrating the optimism and resilience of everyday Americans, nationwide,” said Craig Johnson, president, CPG. “Clearly, households without jobs struggled, but the new rounds of Federal assistance are helping, and our field team is seeing new-found momentum across income levels, and at both deep-value and luxury venues.
Digital channels will drive some 56% of the aggregate increase in 2021 sales, according to the CPG forecast. Big-box stores (such as Costco, Dick’s Sporting Goods, Home Depot and Target) will see soft footfall growth balanced by strong online growth, yielding robust net traffic growth—and even some increases in-store traffic. Average tickets and net traffic will each rise by 3% to 5%, generating the 8.1% sales increase.
Home and hardlines categories—notably home improvement, electronics and electronics—will thrive in 2021, as consumer spending continues to rotate from apparel towards the home and work-from-home lifestyles.”
“Going forward, the key question is how far 2021’s rapid growth will sustain in the second half and the out-years—which is a function of both the pandemic situation and the fundamental health of the American consumer: most important, is job growth improving,” Johnson said.
CGP’s big data retail platform tracks consumer spending, supporting annual, holiday and back-to-school forecasts with nationwide field research across over 100 benchmark shopping venues. The data set spans all retail sectors except autos, gasoline and restaurants.