Despite the coronavirus recession and historically high unemployment, the nation’s largest retail trade group expects to see a healthy jump in holiday spending — 3.6 to 5.2 percent higher than last year — thanks to a strong stock market, rising home values and record savings rates.
The National Retail Federation’s forecast exceeds the average holiday sales growth of 3.5 percent recorded the past five years. The estimate suggests that Americans will spend $755 billion to $767 billion on gifts, entertaining and other holiday festivities.
“Consumers have experienced a difficult year but will likely spend more than anyone would have expected just a few months ago,” Jack Kleinhenz, chief economist for the NRF, said in a statement. “As long as consumers remain confident and upbeat, they will spend for the holiday season.”
Online sales are expected to grow as much as 30 percent from last year, to $218 billion, as more Americans look for ways to shop from home.
The lobbying group’s rosy forecast comes after a particularly grueling year for retailers. More than a dozen major chains, including J.Crew and J.C. Penney, have filed for bankruptcy since April, and analysts say more could follow early next year if they can’t shore up sales during the holiday season.
Many consumers are facing their own financial uncertainties. More than 20 million Americans are collecting some form of unemployment benefits. Even so, Kleinhenz says, some families will be spending more on gifts this year because they’ve had to cut back on travel, dining out and other leisure activities.
“Given the pandemic, there is uncertainty about consumers’ willingness to spend,” he said. “But with the economy improving, most have the ability to spend.”