NRF Report: Retailers Set Record Holiday Sales, Above Estimate

  • In Business
  • 2022-01-14 18:14:16Z
  • By WWD

U.S. retail sales for the holiday season came out better than expected, increasing 14.1 percent, according to the National Retail Federation.

The NRF said Friday that the results beat its own forecast for the season, and transcended a cluster of headwinds, from COVID-19 to supply chain bottlenecks, inventory shortages, labor shortages and inflation.

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Record inflation levels, as well as strong consumer demand, rising wages and low unemployment lifted the retail sales figure for the season. Gains were biggest in apparel, sporting goods and general merchandise, according to the NRF.

While NRF's report was upbeat, the trade organization warned that retailers will continue to face challenges in 2022, specifically citing the pandemic.

During the holiday season, defined by the NRF as the Nov. 1 to Dec. 31 period, sales hit $886.7 billion, easily beating the organization's forecast and setting a new record.

In the 2020 holiday season, U.S. consumers spent $777.3 billion spent, representing 8.2 percent growth over the 2019 season. The 2021 growth compares with an average of 4.4 percent holiday sales growth over the previous five years.

The number includes online and other nonstore sales, which were up 11.3 percent at $218.9 billion. The numbers exclude automobile dealers, gasoline stations and restaurants to focus on core retail.

"We closed out the year with outstanding annual retail sales and a record holiday season, which is a clear testament to the power of the consumer and the ingenuity of retailers and their workers," NRF president and chief executive officer Matthew Shay said in a statement. "Despite supply chain problems, rising inflation, labor shortages and the Omicron variant, retailers delivered a positive holiday experience to pandemic-fatigued consumers and their families. Consumers were backed by strong wages and record savings and began their shopping earlier this year than ever before. This is, in part, why we saw a decline in sales from November to December.

"NRF expects further growth for 2022, and we will continue to focus on industry challenges presented by COVID-19, the supply chain, labor force issues and persistent inflation," said Shay. "The numbers are clear: 2021 was an undeniably outstanding year for retail sales."

"Retail sales displayed solid momentum throughout the holiday season," added NRF chief economist Jack Kleinhenz in a statement. "Worries about inflation and COVID-19 put pressure on consumer attitudes, but did not dampen spending, and sales were remarkably strong. Even though many consumers began shopping in October, this was the strongest November and December we've ever seen. Despite supply chain challenges, retailers kept their shelves stocked and consumers were able to fill their carts both in-store and online. Holiday spending during 2021 reflected continued consumer demand that is driving the economy and should continue in 2022.

"Nonetheless, we should be prepared for challenges in the coming months due to the substantial uncertainty brought by the pandemic."

Back in October, the NRF predicted that 2021 holiday sales would increase between 8.5 and 10.5 percent over 2020 to between $843.4 billion and $859 billion. But in December, the NRF revised its forecast to as much as 11.5 percent growth.

Online spending met NRF's forecast, which called for growth of between 11 and 15 percent to between $218.3 billion and $226.2 billion.

NRF's holiday total includes sales for Nov. 1 through Dec. 31. Retail sales as defined by NRF, which exclude automobile dealers, gasoline stations and restaurants, were down 2.7 percent seasonally adjusted in December from November, but up 13.4 percent unadjusted year-over-year. That compared with a 0.3 percent month-over-month decrease in November, which was up 14.8 percent year-over-year. As of December, sales were up 13 percent unadjusted year-over-year on a three-month moving average.

NRF's numbers are based on data from the U.S. Census Bureau, which said Friday that overall retail sales in December - including autos, gas and restaurants - were down 1.9 percent seasonally adjusted from November but up 16.9 percent year-over-year. That compares with increases of 0.2 percent month-over-month and 18.2 percent year-over-year in November. Despite occasional month-over-month declines, sales have grown year-over-year every month since June 2020, according to Census data.

NRF's statistics showed:

• Sporting goods stores, up 20.9 percent.

• General merchandise stores, up 15.2 percent.

• Furniture and home furnishings stores, up 15 percent.

• Electronics and appliance stores, up 13.8 percent.

• Building materials and garden supply stores, up 13.5 percent.

• Online and other nonstore sales, up 11.3 percent.

• Health and personal care stores, up 9.6 percent.

• Grocery and beverage stores, up 8.6 percent.

According to a preliminary Mastercard SpendingPulseTM from late December, holiday retail sales, excluding automotive, increased 8.5 percent year-over-year, running from Nov. 1 through Dec. 24. Mastercard said online sales grew 11 percent compared to the same period last year. Mastercard SpendingPulse measures in-store and online retail sales across all forms of payment.


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