A little retail therapy appears to be just what the doctor ordered for millions of U.S. shoppers in the process of obliterating retail analysts’ already upbeat holiday spending projections for 2021.
Jack Kleinhenz, chief economist with the National Retail Federation, said Friday that even the trifecta of supply chain disruptions, inflationary threats and the newly discovered omicron variant of the coronavirus has done little to dampen holiday spending momentum.
“There’s no crystal ball to provide a definitive answer, but the latest data is encouraging and provides useful insights,” Kleinhenz stated in a news release issued Friday as the 2021 shopping season nears “the finish line.”
“Consumers and retailers have both revised their playbooks and broken with previous traditions. With the momentum we’ve seen so far likely to continue, it seems probable that we will exceed our initial projection,” he added.
Indeed, the federation initially forecast that 2021 holiday sales would increase between 8.5% and 10.5% compared with year-ago figures, but revised data indicate the increase could actually be closer to 11.5%, CNBC reported.
Early shopping, fueled by concerns that supply chain disruptions could both limit availability and boost prices of in-demand items, appears to have bucked recent trends in which Thanksgiving weekend traditionally served as the holiday shopping season kickoff, Kleinhenz said.
“Consumers remain in solid financial shape and do not appear to be stretched,” he added.
The federation classifies holiday shopping season as those purchases made during November and December, excluding spending at automotive dealers, gas stations and restaurants.
The group originally projected that 2021 November and December sales would hit an all-time high of between $834.4 billion and $859 billion, following a 2020 season that saw holiday sales increase 8.2% from 2019 to $777.3 billion, CNBC reported.
“People have the ability to spend, and I think they are in the mood to spend,” Kleinhenz told the network in an interview, pointing specifically to the low unemployment rate, a rekindled desire to gather for the holidays and strong economic indicators.
“People are creatures of habit. There’s still a lot of time between now and the holidays.” he added.
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