Holiday sales could increase by as much as 11.5% in comparison to 2020
The highest level of inflation in almost four decades, continuing supply chain woes and concerns about the omicron version of the coronavirus won’t stop U.S. consumers spending on loved ones this holiday season.
FOX Business spoke with Katherine Cullen, senior director of industry insights and consumer insights, National Retail Federation. “People went into this holiday season wanting to make up some of last year.”
Cullen says that despite last year’s strong sales, “many localities” are saying that there are safe ways for families to gather and safe ways to travel this year. This means that people don’t have to cancel their holiday plans.
She said, “I think people want to spend even more this holiday season because they want to celebrate their loved ones and friends.” They’re spending a lot on gifts. They are spending money on travel.
NRF data from October revealed that people over 65 planned to spend more this year on gifts than in 2020.
Cullen suggested that this could be because they’re expecting to spend the holidays with younger relatives or their grandchildren.
She said that spending is driven by emotions.
According to the NRF (which calculates retail sales, it excludes automobile dealers and gasoline stations), sales increased 14.2% in the first 11 months.
As a result, the NRF projected that 2021 would be another “strong holiday season,” especially since retailers and consumers were prepared to combat the economic headwinds early on, Cullen said.
Retailers began offering deep discounts as early October. Cullen reminded customers to start shopping early so that they have enough time to find the items they need, even if they are back-ordered.
She said, “That messaging from retailers seems to have paid off.”
Cullen said that although 30% of holiday shoppers reported difficulty finding the right items, this doesn’t mean they are giving up.
They are instead “looking around for other options.” She said that they are looking for a substitute.
Cullen stated that consumers told NRF that fuel and food are the most affected by inflation. However, this doesn’t deter people from purchasing gifts.
Cullen stated that growing concerns over the omicron variant of the drug are unlikely to stop people from shopping during this season.
She said that “a lot of people have already begun their holiday shopping and so many of those gifts are already purchased.”
Cullen stated that 61% of holiday shoppers had already begun their shopping for Christmas by early November according to NRF data.
According to the NRF, November sales increased 14% year-over-year.
Matthew Shay, CEO of NRF, predicted that holiday sales in November and December would grow by as much as 11.5% compared to 2020.
Cullen stated that there is still uncertainty about COVID, continued uncertainty about inflation, and concerns about the new variant. “But, in general, we’re in a very different spot than last holiday season.”