Holiday Sales Jumped 8%, Blowing Past NRF Forecast, Despite Pandemic's Shadow
November-December holiday sales sailed past National Retail Federation forecasts, soaring an “unexpectedly high” 8.3% over the 2019 period, despite COVID-19 challenges, reported the trade group Friday. Total U.S. retail sales for the period were $789.4 billion, including e-commerce and physical store sales. NRF had forecast a 3.6%-5.2% bump to between $755.3 billion and $766.7 billion.
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Online and other non-stores sales -- including mail-order, catalogs, telephone sales, kiosks and vending machines -- grew 23.9% to $209 billion. NRF expected e-commerce sales to increase 20-30% to $202.5 billion-$218.4 billion. It hasn’t calculated a store-only percentage yet, a spokesperson said.
Sales at consumer electronics and appliance physical stores dropped 14.4% vs. a 2% year-on-year drop in 2019, the spokesperson said. On whether sales in those categories were pulled forward as consumers shifted discretionary spending to home entertainment and appliance upgrades during COVID-19 lockdowns, the spokesperson noted “a lot of spending on electronics during the back-to-school season as families got their children ready for online learning.” NRF didn't break out percentages between CE and appliance categories.
NRF Chief Economist Jack Kleinhenz cited a “massive boost to most consumer wallets this season.” Many consumers were able to “splurge on holiday gifts” because of extra money they received from stimulus payments during the year and money saved by not traveling, dining out or going to concerts or movies, he said. Though “some families are still struggling, as are some retail sectors,” the promise of a new round of stimulus checks, after a congressional deal was struck before Christmas, “helped increase consumer confidence.”
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," said Kleinhenz. Consumers turned to quick in-and-out trips to stores and took advantage of buy online, pick up in-store services retailers have put in place as a contactless shopping option, he noted.
Consumers and retailers demonstrated “incredible resilience” during the holiday season, “despite unprecedented challenges,” said NRF CEO Matthew Shay. “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,” Shay said. 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.
The 8.3% holiday season increase was more than double the 3.5% average holiday increase over the previous five years, including a 4% gain in 2019, said NRF. The strong finish to 2020 "could be a good sign for the continuing recovery of the economy this year," Kleinhenz said. Shay said: "We believe President-elect Biden’s stimulus proposal, with direct payments to families and individuals, further aid for small businesses and tools to keep businesses open, will keep the economy growing.”