Consumer Behavior

Holiday sales growth to hit between 3.6% to 5.2%, predicts NRF

Photo by istock.com

November 24, 2020

Holiday sales between November and December won't be as dim as some may think due to the pandemic as there will be growth, according to the National Retail Federation.

That growth is projected to be between 3.6% and 5.2%, and that's due to consumer resilience, Matthew Shay, NRF president and CEO, said in a press release.

"We know this holiday season will be unlike any other, and retailers have planned ahead by investing billions of dollars to ensure the health and safety of their employees and customers," Shay said. "Consumers have shown they are excited about the holidays and are willing to spend on gifts that lift the spirits of family and friends after such a challenging year. We expect a strong finish to the holiday season and will continue to work with municipal and state officials to keep retailers open and the economy moving forward at this critical time."

Sales will land between $755.3 billion and $766.7 billion, which does not include auto sellers, gas stations or restaurants. Last year the sales growth was 4%, culminating in $729.1 billion.

NRF expects that online and other non-store sales, which are included in the total, will jump between 20% and 30%, to between $202.5 billion and $218.4 billion, up from $168.7 billion last year.

"Given the pandemic, there is uncertainty about consumers' willingness to spend, but with the economy improving, most have the ability to spend," NRF chief economist Jack Kleinhenz said in the release. "Consumers have experienced a difficult year but will likely spend more than anyone would have expected just a few months ago."

As a result of store shutdowns and stay-at-home orders last spring, not all retailers have rebounded as quickly, including small and mid-sized retailers, according to the NRF. However, aggregate retail sales have seen a V-shaped recovery, growing both month-over-month and year-over-year each month since June.

E-commerce sales were up 36.7% year-over-year during the third quarter, according to the release.

NRF expects retailers to hire between 475,000 and 575,000 seasonal workers compared to 562,000 in 2019.