Holiday spending for 2021 has the potential to reach new heights. The National Retail Federation (NRF) expects holidays sales to grow between 8.5% and 10.5% during November and December, which rings us in at a grand total between $843.4 and $859 billion of sales (yes, that’s billion with a B!). This increase would mark an all-time high for holiday sales growth. Last year, sales soared by 8.2% to $777.3 billion. These back-to-back surges are quite high as the recent yearly average for retail sales has been an increase of 4.4%.
Why Is There An Increase In Spending?
As we head into the holiday season, there is “considerable momentum” as said by NRF. Consumers are in a better position compared to last year with increased wages and more job stability, and this momentum has translated into retail. Retailers have had a smoother year compared to 2020 as consumers are getting more comfortable navigating life with COVID-19.
Increase In E-Commerce Sales
If we dive a little deeper into these stats, we’ll also discover that e-commerce sales are expected to rise, too. This year online shopping, curbside pickup, and home deliveries have become a part of everyday life, so this too will roll into the holiday season. The NRF predicts that online sales will increase between 11% to 15%, which would add up to roughly $196.7 billion more than 2020.
As you’re probably well aware, e-commerce shopping has had extraordinary success as consumers turned to online shopping during the pandemic. Not only was online shopping crucial for everyday necessities like groceries and home goods, but also for holiday gifts and seasonal items. While NFR expects online shopping to stay relevant, they do foresee more households shifting back to in-store shopping for this holiday season.
Current Challenges of Retail
The challenges that retailers face this year are the supply chain and labor shortages. As stores struggle to get goods, shoppers can expect fewer discounts, longer shipping times, and more out-of-stock items.
Items are already flying off the shelves, so retailers encourage buyers to shop early to avoid a lack of inventory or delays. If you’re reading this now and still haven’t shopped, there’s a good chance you’ll have to make some adjustments and buy something different than what’s on the wish list.
As a way to combat the shortages, NFR predicts that over 500,000 workers will be hired as seasonal staff in retail settings. With this boost, hopefully, stores can keep up with the demand.
Holiday Spending By Category
As you’ve learned, shoppers are spending billions of dollars for the holidays in total, but you might be wondering what are they spending all that money on? Here are the top spending categories for all shoppers…
Average Spending in U.S. Dollar Per Consumer
- Holiday Gifts = $572
- Restaurants = $178
- Other Holiday-Related Items = $142
- Entertainment = $68
- Personal Care Services = $57
Not only is the outlook for retail spending looking favorable, but restaurants, entertainment, and travel are doing well, too.
With these predictions, retailers will have to shift to meet the high demands of holiday spending this year. And, for consumers — if you haven’t done your holiday shopping yet, it might be a good idea to start now before it’s too late!
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