Holiday spending has the potential to shatter previous records. The National Retail Federation (NRF) forecasts that holiday sales during November and December will grow between 8.5 percent and 10.5 percent over 2020 to between $843 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 billion and an average increase of 4.4 percent over the past five years.
“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.”
Last year saw massive growth in digital channels as consumers turned to online shopping to meet their holiday needs during the pandemic. While ecommerce will remain important, households are also expected to shift back to in-store shopping and a more traditional holiday shopping experience.
“Pandemic-related supply chain disruptions have caused shortages of merchandise and most of this year’s inflationary pressure,” NRF Chief Economist Jack 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.”
NRF expects retailers will hire between 500,000 and 665,000 seasonal workers to combat what could be the highest holiday retail sales ever. That compares with 486,000 seasonal hires in 2020. Some of this hiring may have been pulled into October as many retailers encouraged households to shop early to avoid a lack of inventory and shipping delays. With the earlier start retailers have announced thousands of open positions in bricks-and-mortar stores and warehouse and distribution centers.