Holiday retail sales in retail were up higher than expected, according to the National Retail Federation, exceeding expectations by increasing 8.3% to $789.4 billion, as shoppers seeking normalcy used what was left of stimulus funds and unused travel and leisure to purchase holiday gifts.
Online and non-store sales were up a brisk 23% between Nov. 1 and the end of the year, NRF reported, as the ecommerce boom continued unabated.
In November, NRF had predicted more modest growth of between 3.6% and 5.2% over last year, but the numbers came in at more than double the 2019 increase of 4% and well above the five-year average of 3.5% growth.
“Despite unprecedented challenges, consumers and retailers demonstrated incredible resilience this holiday season,” said NRF President and CEO Matthew Shay in a statement. “Faced with rising transmission of the virus, state restrictions on retailers and heightened political and economic uncertainty, consumers chose to spend on gifts that lifted the spirits of their families and friends and provided a sense of normalcy given the challenging year.”
NRF Chief Economist Jack Kleinhenz said holiday retail sales were especially strong, but many shoppers waited until the back half of December, when it became difficult for online orders to arrive by Christmas. This was where options like curbside and store pickup came into play.
Kleinhenz also said the strong results bode well for overall economic growth, as retail is a strong overall indicator.
“There was a massive boost to most consumer wallets this season,” Kleinhenz said. “Consumers were able to splurge on holiday gifts because of increased money in their bank accounts from the stimulus payments they received earlier in the year and the money they saved by not traveling, dining out or attending entertainment events. Some families are still struggling, as are some retail sectors. But the promise of a new round of stimulus checks after a deal was struck before Christmas helped increase consumer confidence.”
News of the arrival of COVID-19 vaccine also offset fears and led more people to hit the stores, boosting holiday retail sales, he said.
Category performance was a mixed bag, NRF reported, and followed pandemic trends, with building materials and garden supplies leading with 19% growth, as consumers continue to fix up their properties, and sporting goods were up 15.2%.
On the downside, general merchandise stores were flat while electronics and appliance stores were down 14.4% – surprising, given the former is usually a strong holiday performer – and clothing and clothing accessory stores dipped nearly 15%, an area that has been weak since the COVID-19 outbreak.
December retail sales, according to the U.S. Census Bureau, were down 1.6% seasonally adjusted from November but up 8.6% unadjusted year-over-year. This was even better than November, which saw an 8% gain from 2019 even though it had declined about 1% from October. As of December, the three-month moving average was up 8.9% from the same period in 2019.