NRF Predicts Holiday Sales Will Rise up to 10.5%

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Dive Brief:

  • Echoing other reports of higher holiday sales, the National Retail Federation on Wednesday predicted that this year’s holiday sales will rise between 8.5% and 10.5% over 2020, to between $843 billion and $859 billion. 
  • The NRF said it projects that online and non-store sales will grow between 11% and 15% to between $218 billion and $226 billion. 
  • The organization anticipates that retailers will hire between 500,000 and 665,000 seasonal workers, up from 486,000 last year. Some of the hiring may have occurred in October, as retailers sought to encourage shoppers to buy their goods early in light of inventory and shipping woes, according to the announcement.

Dive Insight:

The NRF’s report reflects cautious optimism about the forthcoming holiday season. The organization cited growth in wages and household wealth as reasons behind the increase in holiday spending, but also said that a surge in COVID-19 infections could disrupt the projected rise in holiday spending. 

Other reports reflect a similar wariness about the future. Per a recent report from Alvarez & Marsal’s Consumer Retail Consumer Group, 52% of consumers anticipate their situations remaining the same or worsening over the next six months, and 57% of consumers think they’ll have the same or less money during the same period. Consumers are also concerned about supply chain challenges, with 75% of shoppers worried about products going out of stock this holiday season. 

Still, multiple reports have projected a rise in consumer holiday spending and overall sales. A JLL report earlier this month indicated that consumers aim to spend about $870 per person on average on holiday expenses, a 25.4% bump from 2020. The NPD Group’s recent report, which also found that consumers plan to spend more this year, projected that 2021 holiday sales could rise by 3% in November and December. 

“Pandemic-related supply chain disruptions have caused shortages of merchandise and most of this year’s inflationary pressure,” NRF Chief Economist Jack Kleinhenz said in a statement. “With the prospect of consumers seeking to shop early, inventories may be pulled down sooner and shortages may develop in the later weeks of the shopping season. However, if retailers can keep merchandise on the shelves and merchandise arrives before Christmas, it could be a stellar holiday sales season.”

Source: Retail Dive