The latest figures from the U.S. Census Bureau indicate that consumers began their holiday shopping earlier this year. October sales were up 1.8% from the previous month and 16.3% year over year. The National Retail Federation’s (NRF) calculation of retail sales––which excludes automobile dealers, gasoline stations and restaurants to focus on core retail––reveals November sales were unchanged from October, but up 14.8% unadjusted year over year.
NRF, which projected retail sales would reach between $4.44 trillion and $4.58 trillion for 2021, noted the November sales report underscores the strength of consumers amid economic challenges such as inflation and supply chain disruptions. For the first 11 months of the year, sales, as calculated by NRF, were up 14.2% over the same period in 2020.
“Despite economic headwinds, November retail sales data confirms that consumers continue to spend, as demonstrated by a 14[%] increase in sales year-over-year,” said NRF President and CEO Matthew Shay. “We expect demand will remain strong through December, even though consumers started holiday shopping earlier than ever this year. Despite the rise of the Omicron variant, increased vaccination rates combined with retailers’ ongoing safety protocols and procedures have resulted in consumers who feel they can continue to shop safely and conveniently. We believe that holiday sales this year could grow as much as 11.5[%] over 2020.”
Additionally, many consumers began their holiday shopping early. NRF defines the holiday shopping period between Nov. 1 through Dec. 31. Many shoppers began their holiday shopping in October as retailers put on sales earlier in the season to mitigate the possibility of supply chain issues.
November sales were up in all but three categories on a monthly basis and were up across the board year-over-year, led by increases at clothing, sporting goods and furniture stores.
“Consumers continued spending in November, building on momentum from strong early holiday shopping in October and setting the stage for a bright holiday season,” said NRF Chief Economist Jack Kleinhenz. “Consumers’ financial condition remains healthy and neither stubborn inflation nor COVID-19 appear to have derailed holiday spending despite both being top of mind. Recent labor market progress has helped propel incredibly strong demand, and most shoppers have the income and savings to absorb higher prices driven by the pandemic and supply chain disruptions.”
Despite the flatter sales in November, NRF is still bullish the year-end sales will meet its projections for the retail sector.
“While seasonally adjusted numbers may make the results look modest, seasonal patterns have been significantly disrupted by the pandemic and unadjusted data shows November’s sales as calculated by NRF were actually the highest on record,” Kleinhenz said.