The National Retail Federation today released its holiday sales forecast under the headline, “NRF Predicts Highest Holiday Retail Sales on Record.” To call it bullish would be to understate.
Holiday spending has the potential to shatter previous records, as the National Retail Federation today forecast that holiday sales during November and December will grow between 8.5 percent and 10.5 percent over 2020 to between $843.4 billion and $859 billion. The numbers, which exclude automobile dealers, gasoline stations and restaurants, compare with a previous high of 8.2 percent in 2020 to $777.3 billion and an average increase of 4.4 percent over the past five years.
This NRF graph tracks sales history with the new forecast.
“There is considerable momentum heading into the holiday shopping season,” NRF President and CEO Matthew Shay said. “Consumers are in a very favorable position going into the last few months of the year as income is rising and household balance sheets have never been stronger. Retailers are making significant investments in their supply chains and spending heavily to ensure they have products on their shelves to meet this time of exceptional consumer demand.”
Despite concerns with rising prices (inflation), supply-chain disruptions, and labor shortages, the NRF believes consumers are back and their members will be able to fulfill demand.
As we posted yesterday, consumer confidence increased last month and business economists, while slightly reducing their GDP projections, still see solid growth ahead. There’s plenty of reason to believe that consumers – all of us – are yearning for a “normal” holiday season this year and are planning and shopping accordingly.
“The outlook for the holiday season looks very bright,” NRF Chief Economist Jack Kleinhenz said. “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.”
“Pandemic-related supply chain disruptions have caused shortages of merchandise and most of this year’s inflationary pressure,” Kleinhenz said. “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.”
“If” does a fair bit of work in that last sentence, but the optimism appears justified. Read the whole release for more information.