The National Retail Federation is forecasting a record holiday shopping season, with sales for November and December forecast to grow between 8.5% and 10.5% and reach between $843.4 billion and $859 billion — excluding restaurants, gas stations and auto dealers.
The forecast exceeds the previous record in 2020 when sales grew 8.2% to $777.3 billion.
” The unusual and beneficial position we find ourselves in is that households have increased spending vigorously throughout most of 2021 and remain with plenty of holiday purchasing power,” said NRF Chief Economist Jack Kleinhenz in a statement.
While e-commerce will continue to be important this holiday season after soaring through the COVID-19 pandemic, NRF expects shoppers to return to stores.
With supply chain challenges top of mind for both retailers and consumers, the group says both sides have made adjustments. Retailers have pulled forward their work to get merchandise on shelves, and the NRF says that indicators are that consumers have taken heed of warnings to begin their shopping earlier than usual.
“Retailers have evolved and adapted, so have consumers,” said Matthew Shay, NRF chief executive, on a Wednesday call with media.
These adjustments could drive shifts in inventory as the season progresses.
“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,” said Kleinhenz in a statement.
The NRF expects retailers to hire between 500,000 and 665,000 seasonal workers, up from 486,000 last year.
And the group is forecasting digital and non-store sales of between $218.3 billion and $226.2 billion, up from $196.7 billion in 2020.
Adobe /zigman2/quotes/200389143/composite ADBE -2.57% forecasts U.S. holiday sales online of $207 billion from Nov. 1 to Dec. 31, also a record. Experts there say supply chain challenges will drive up out-of-stock messages a whopping 172% compared with the pre-pandemic period.
Adobe also found that key shopping days like Cyber Monday and Black Friday are becoming less significant to shoppers. Sensormatic Solutions, the global retail arm of Johnson Controls /zigman2/quotes/203776087/composite JCI -4.59% , also has similar findings.
“We also expect to see the return of weekday shopping, a trend that started last year as more consumers made the most of flexible remote work schedules to shop during days and times that were perceived to be less busy or crowded in-store,” said Brian Field, senior director of global retail consulting at Sensormatic Solutions, in a statement.
Deloitte’s latest holiday retail survey found that holiday spending will average $1,463 per household, up 5% versus last year and with nearly all gains coming from upper-income households.
“[T]here is a tale of two holiday seasons, with higher-income households planning to spend five times that of lower-income households,” the Deloitte report says.
“Indeed, the majority of this season’s gains will be driven by higher-income shoppers who expect to spend 15% more than last year (averaging $2,624 per household). Meanwhile, lower-income groups plan to spend 22% less (averaging $536 per household).”
“If retailers can keep merchandise on shelves and it arrives by Christmas, it will be a stellar Christmas,” NRF’s Kleinhenz said on the media call.
The SPDR S&P Retail ETF /zigman2/quotes/206947004/composite XRT -2.78% has advanced 45.5% for the year to date while the S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.90% has gained 22.1% for the period.