Merchandising

NRF report: Pandemic driving 'most challenging time' for retail

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December 3, 2020

The ongoing COVID-19 pandemic is making this year's holiday season one of the most unusual and most challenging in retail's history, according to National Retail Federation Chief Economist Jack Kleinhenz.

And the multitude of factors hitting the economy is making predictions and retail forecasts extremely difficult, he wrote in this month's NRF Monthly Economic Review.

"This is a year when it is particularly important to recognize known risks, understand unusual factors and attempt to reduce oversights when making predictions," he wrote. "Despite uncertainty, we are optimistic that households will keep up the energy of spending through the end of the year."

The next few weeks will prove compelling given the potential spread of the coronavirus due to Thanksgiving celebrations.

"The near-term concern is the long shadow cast on the economy by the surging virus and expiring government support," Kleinhenz wrote. "Every virus indicator across the United States is elevated and accelerated, which could pump the brakes on the momentum we have seen and have consequences for spending."

The NRF expects holiday spending to jump between 3.6% and 5.2% this year.

The forecast is based on economic indicators including employment, disposable income, past retail sales, consumer confidence and other factors. But this year Kleinhenz also took into consideration "high frequency" data that comes out as often as weekly in addition to the usual monthly and quarterly data.