Retailers could end up having a strong finish to 2020, despite all of the challenges that the coronavirus pandemic has dealt the industry, according to a new forecast.
The National Retail Federation said Monday it expects holiday sales during November and December to rise between 3.6% and 5.2% year over year, amounting to between $755.3 billion and $766.7 billion.
Last year, holiday sales rose 4% to $729.1 billion, NRF said. And holiday sales on average have increased 3.5% for the past five years. The sales forecast excludes automobile dealers, gasoline stations and restaurants.
Online and other non-store sales are forecast by NRF to jump 20% to 30%, amounting to between $202.5 billion and $218.4 billion, compared with $168.7 billion in 2019.
“The outlook for the holiday season is very bright,” NRF President and CEO Matt Shay said during a call with members of the media. “We’ve seen consumers are very engaged [and] looking for opportunities to celebrate.”
The forecast this year from NRF, the industry’s leading trade group, was delayed by the uncertainty stemming from the coronavirus pandemic. Typically, NRF releases its expectations in early October.
The presidential election earlier this month also was a distraction for consumers, especially during the period when votes were still being counted. The back-and-forth talks around the potential for additional government stimulus, which would have been a welcomed gift for consumers and companies ahead of the holidays, has proven to be another wildcard.
Retail sales in the United States increased by less than expected in October. The possibility remains that sales could be hurt further by the spike in Covid infections and deaths since Election Day. Unemployment remains elevated, and some states have once again begun to shutter indoor dining, and roll out other restrictions that could result in additional furloughs or layoffs.
Hope around the distribution of an effective Covid vaccine has sparked more recent optimism, however.
British pharmaceutical giant AstraZeneca said Monday an interim analysis of clinical trials showed its coronavirus vaccine has an average efficacy of 70% in protecting against the virus. That news came after a string of encouraging vaccine results over the course of this month, following late-stage trial readouts from Pfizer–BioNTech and Moderna.
Ahead of NRF’s forecast Monday, shares of Gap, Express, Nordstrom, Macy’s, Kohl’s and the mall owner Simon Property Group were rising. Investors are anticipating consumers will soon be more comfortable retuning to malls and spending more money on apparel and accessories.
Macy’s CEO Jeff Gennette said last week that the department store chain is planning for a gradual improvement in its business in the back-half of 2021, “based on a potential vaccination.” But, he said, the retailer also has another scenario “that would suggest that we don’t have the vaccination that’s scalable.”
“We’ll be ready for either,” he said.
But with Black Friday just four days away, Americans’ anxiety about going to stores to shop remains heightened. More are planning to buy online, and they are checking items off their list earlier in the season. A survey from NRF earlier this month found 42% of consumers had started their holiday shopping earlier this year than they normally do.
This story is developing. Please check back for updates.