Retail sales during 2020’s November-December holiday season grew an unexpectedly high 8.3% over the same period in 2019 to $789.4 billion, exceeding the National Retail Federation’s (NRF) holiday forecast despite the economic challenges of the coronavirus pandemic, NRF said. The numbers include online and other non-stores sales, which were up 23.9% at $209 billion.
“Despite unprecedented challenges, consumers and retailers demonstrated incredible resilience this holiday season,” NRF President and CEO Matthew Shay said. “Faced with rising transmission of the virus, state restrictions on retailers and heightened political and economic uncertainty, consumers chose to spend on gifts that lifted the spirits of their families and friends and provided a sense of normalcy given the challenging year. We believe President Biden’s stimulus proposal, with direct payments to families and individuals, further aid for small businesses and tools to keep businesses open, will keep the economy growing.”
NRF Chief Economist Jack Kleinhenz said consumers shifted into high gear in December, giving the holiday season a strong finish that could be a good sign for the continuing recovery of the economy this year. The 8.3% holiday season increase was more than double the 3.5% average holiday increase over the previous five years, including 2019’s 4% gain.
“There was a massive boost to most consumer wallets this season,” Kleinhenz said. “Consumers were able to splurge on holiday gifts because of increased money in their bank accounts from the stimulus payments they received earlier in the year and the money they saved by not traveling, dining out or attending entertainment events. Some families are still struggling, as are some retail sectors. But the promise of a new round of stimulus checks after a deal was struck before Christmas helped increase consumer confidence. Consumers were also encouraged by the news of COVID-19 vaccines becoming available, which helped offset concerns about increased infection rates and state restrictions on activity.”
Kleinhenz said holiday-related spending picked up in the third and fourth weeks of December, after it was too late to expect delivery of online purchases by Christmas. Consumers turned to quick in-and-out trips to stores and took advantage of buy online, pick up in-store/curbside services retailers have perfected over the past several months.
NRF had forecast that sales during the 2020 holiday season — defined as November 1 through December 31 — would increase between 3.6% and 5.2% over 2019 to a total between $755.3 billion and $766.7 billion. The forecast called for online sales to increase between 20% and 30% to between $202.5 billion and $218.4 billion. The numbers exclude automobile dealers, gasoline stations and restaurants.
Retail sales during December were down 1.6% seasonally adjusted from November but were up 8.6 unadjusted year-over-year. That built on a year-over-year gain of 8% in November despite November’s month-over-month decline of 0.9% from October. As of December, the three-month moving average was up 8.9% over the same period in 2019.
NRF’s numbers are based on data from the U.S. Census Bureau, which said that overall December sales — including auto dealers, gas stations and restaurants — were down 0.7% seasonally adjusted from November but up 2.9% unadjusted year-over-year.