Holiday sales are set to increase between 7% and 9% compared to last year, according to a new report from Deloitte. E-commerce sales are projected to rise even higher, between 11% and 15% compared to the 2020 season.
Overall, retail sales will reach $1.28 to $1.3 trillion during the November to January timeframe, with e-commerce sales accounting for between $210 billion and $218 billion.
The boost in sales is in line with predictions from the National Retail Federation (NRF), which increased its 2021 retail sales forecast earlier this year. NRF expects total retail sales to reach up to $4.44 trillion by the end of 2021. That’s a growth rate between between 10.5% and 13.5% compared to 2020.
The jump in retail is likely due to growing consumer confidence as pandemic restrictions have eased throughout 2021 with COVID-19 vaccines being readily available. However, a rise in cases from the Delta variant of the virus has placed some uncertainty on the longevity of the economic rebound. Despite this, the holiday shopping season is still expected to be strong.
“We anticipate strong consumer spending for the upcoming holiday season,” Daniel Bachman, Deloitte’s U.S. economic forecaster, said in a statement. “As vaccination rates rise and consumers are more comfortable being outside of the home, we are likely to see increased spending on services, including restaurants and travel, while spending on goods will continue to hold steady.”
Consumers are also giving up some of their pandemic habits. Flushed with cash after multiple rounds of government stimulus, many families were saving last year in the face of uncertainty and unpredictable employment status. Now, with more confidence, consumers are spending again. E-commerce sales are likely to remain strong as people still continue to look for cautious shopping methods.
“A steady decline in the savings rate to pre-pandemic levels will support consumer spending and keep retail sales elevated this season,” Bachman said. “Further, e-commerce sales will continue to grow as consumers demonstrate an ongoing and steady movement toward buying online across all categories.”
The higher figures follow a 5.8% increase in holiday season spending last year. Sales in 2020 were actually higher than originally anticipated. This year, the remaining uncertainty may lead to more spending on goods.
“Across channels, retailers should expect a strong holiday season as consumer spending levels are projected to remain high,” Rod Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader, said in a statement. “While consumer concerns about health and safety have eased since the last holiday season, pandemic-influenced shopping behaviors continue to gain traction. Retailers who remain resilient to shifting consumer behaviors and offer convenient options for online and in-store shopping, as well as order fulfillment, will be poised for growth this holiday season, and into the new year.”