Shoppers hold hands at the Willow Grove Park Mall in Willow Grove, Pennsylvania, November 14, 2020.
Mark Makela | Reuters
Retailers will see eager holiday shoppers flock to stores and websites even as some toys, clothes and other gift-giving items remain stuck at congested ports, according to a new forecast that cited rising household incomes and high savings rates for its upbeat outlook.
The National Retail Federation said Wednesday that it expects holiday sales during November and December to rise between 8.5% and 10.5%, which would total $843.4 billion and $859 billion of sales. The sales forecast excludes spending at automobile dealers, gasoline stations and restaurants.
NRF President and CEO Matt Shay acknowledged supply chain and labor shortages as headwinds on a call with reporters, but said retailers have planned ahead to make sure they have plenty of inventory and consumers have taken cues by starting to shop in October.
In some cases, he said, shoppers may have to buy a different item than the one that’s on their wish lists. Still, he said, that won’t tamp down on their enthusiasm.
“They are going to affirmatively be out shopping for the holiday season and they won’t go home empty-handed,” he said. “They will shop, they will purchase and they will find that item.”
He said consumers feel more comfortable traveling, going out to restaurants and staying at hotels again. That mobility could lift retail sales, too, as they buy goods for more active lives. Plus, he said, international tourists who are fully vaccinated will be able to visit the U.S. starting Nov. 8.
“We think that’s also going to give a jolt to the retail side,” he said.
Other holiday forecasts have also predicted a significant jump in year-over-year spending. Sales in November and December are expected to grow at least 7% compared with last year, according to different forecasts from Bain, Deloitte and Mastercard SpendingPulse.
However, shoppers will face challenging dynamics as retailers struggle to get goods from factories to store shelves because of congestion at ports, rising materials costs and a shortage of truck drivers. That is expected to translate into fewer discounts, longer shipping times and more out of stock items.
Retailers, including Target, Best Buy, Amazon and Walmart, have announced early holiday sales events, and have even dangled exclusive access for loyal customers or encouraged shoppers to buy desired items as soon as they see them.
Last year, holiday sales rose 8.2% from 2019 to $777.3 billion, according to the NRF, as consumers cheered themselves up with gift-giving during the pandemic. Holiday retail sales have increased by 4.4% on average over the past five years.
This story is developing and will be updated.