The National Retail Foundation (NRF) announced on Wednesday that the upcoming holiday season has the potential to break previous records, with holiday sales expected to increase by as much as 10 percent from last year.
The NRF revealed in a statement that its forecasts suggest holiday sales in November and December will grow between 8.5 percent and 10.5 percent from last year, bringing total sales to between $843.4 billion and $859 billion.
Last year, holiday sales grew by 8.2 percent to $777.3 billion, according to the NRF, and over the past five years, the average increase has been 4.4 percent.
Those numbers, however, do not include automobile dealers, gas stations and restaurants. The group said it considers the holiday season to start Nov. 1 and last through Dec. 31.
NRF President and CEO Matthew Shay said that “considerable momentum” exists as the U.S. inches closer to the holiday shopping season, pointing to rising income, strong balance sheets and investments in supply chains by retailers.
“Consumers are in a very favorable position going into the last few months of the year as income is rising and household balance sheets have never been stronger,” Shay said.
The NRF is projecting that online and other nonstore sales, which are calculated in the total, will grow by between 11 percent and 15 percent to between $218.3 billion and $226.2 billion. Those increases will largely be driven by online purchases.
For comparison, online and other nonstore sales are up from $196.7 billion in 2020, according to the NRF.
The trade association added that households are expected to move back toward traditional holiday shopping methods such as in-store shopping this year, although e-commerce will still be important.
The projections for holiday shopping come as the U.S. continues to grapple with serious supply chain issues that have caused concerns for the upcoming holiday season.
Manufacturers, suppliers and distributors that were forced to lay off workers and slow operations at the beginning of the pandemic are now having a difficult time reacting to the spike in demand, which has led to large bottlenecks at ports and other segments of the supply chain.
Jack Kleinhenz, the NRF’s chief economist, said that if retailers can continue stocking shelves with merchandise, the upcoming holiday season can be one of great success.
“Pandemic-related supply chain disruptions have caused shortages of merchandise and most of this year’s inflationary pressure,” Kleinhenz said in a statement.
“With the prospect of consumers seeking to shop early, inventories may be pulled down sooner and shortages may develop in the later weeks of the shopping season. However, if retailers can keep merchandise on the shelves and merchandise arrives before Christmas, it could be a stellar holiday sales season,” he added.
The NRF also predicted that retailers will hire between 500,000 and 665,000 seasonal workers in the coming months, which is up from the 486,000 who were brought on last year.
Some of those hirings may begin in October, as some retailers are urging households to start their holiday shopping early to prevent inventory shortages and shipping delays.
Retailers have already announced openings for bricks-and-mortar stores, warehouses and distribution centers, according to NRF.
The trade association also said that the holiday weather forecast is contributing to his predictions of a successful sales season. The National Oceanic and Atmospheric Administration is expecting the winter to be a La Niña pattern — with cooler and wetter weather in the North and warmer and drier weather in the South — which in the past has corresponded with stronger retail sales, according to the NRF.