Retail sales expected to gain momentum as the holiday shopping season approaches
Retail sales are expected to post gains of between 3% and 5%, with 29% of U.S. consumers saying they will spend more this holiday season than in previous years.
“It will be a hybrid party this year, mixing the return of a festive feeling with the now normalized pandemic lifestyle,” said Marshal Cohen, chief retail industry advisor for NPD Group. “We expect the sustained consumer propensity to spend to continue through the traditional buying period of November and December. However, shopping in the here and now and other spending styles that emerged during the pandemic will bring additional growth to the extended shopping season from October to January of this year. “
NPD predicts vacation spending will increase 3% in November and December, and 5% when the season expands to include October and early January. Responses to NPD’s recent holiday buying intention study show that while two-thirds of respondents say their 2021 holiday shopping season will be more like last year’s than seasons. pre-pandemic, consumers on the whole are more optimistic than they were in 2020.
A third of consumers plan to buy more gifts because they will be seeing friends and family during the holiday season, and almost half say they will be visiting or hosting family. Six in 10 consumers are more comfortable shopping in-store, around 32% say they are less concerned about COVID-19 than they were last year.
More than half of those polled say they will start their holiday shopping earlier, before Thanksgiving, with the biggest increase in spending expected on consumer tech and home products.
“New optimism, along with an underlying uncertainty, is fueling buying expectations, making it a more complex holiday season for consumers and merchants,” Cohen said. “But retailers and manufacturers who remain flexible will be able to navigate the diverse landscape of consumer behavior and achieve a successful vacation outcome.”
Online shopping also remains a major driver of retail growth over the past few months. As of March 2020, the average amount spent each month per shopping trip is between 13% and 29% more than the same month a year earlier, according to NPD Group data released in September. The increase is in part due to a general shift towards online shopping, where average selling prices and the amount spent on each transaction already tended to be higher, according to the survey.