The pandemic hasn’t derailed holiday shopping this year — at least not yet.
Retail sales are on track to grow by as much as 5.2 percent to $767 billion during November and December as many consumers enter the holiday season with fatter savings accounts and less debt, according to a forecast by the National Retail Federation.
“We’ve seen consumers very engaged, looking for an opportunity to celebrate and they have moved into real consumption mode,” NRF chief executive Matthew Shay said during a Monday media briefing.
At the same time, the trade group cautioned that sales could rise just 3.6 percent or less — compared with a 4 percent increase in 2019 — because of the economic uncertainty surrounding surging numbers of COVID-19 cases across the country, which could result in states and cities shutting down their local economies as they did earlier this year.
“It’s hard to quantify such uncertainty,” NRF chief economist Jack Kleinhenz said during the call.
The economist said the shopping forecast assumes that unemployment will remain around the October level of 6.9 percent, adding, “a lot will depend on the labor force participation rate and those receiving benefits.”
Sales were up by 10.6 percent in October compared to a year ago — in part because people started shopping earlier — but they were also up by 6.4 percent for the first 10 months of the year compared to the same period in 2019, according to the NRF.
“We have had a record level of savings and less spending on travel and entertainment, so consumers have more dollars in their wallets to spend right now,” Kleinhenz said, pointing to federal stimulus checks that arrived this summer as a contributing factor.
The NRF also expects online sales to increase by 20 to 30 percent in November and December compared with a year ago.
E-commerce sales were up 37 percent in the third quarter, but it is not expected to continue at that clip, Shay said.
“There is a pumping of the break with the long shadow of the surging virus and government benefits expiring,” for many people, Shay added.