A billboard advertises sales at a clothing store in a Colorado mall.
David Zalubowski / AP
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David Zalubowski / AP
A billboard advertises sales at a clothing store in a Colorado mall.
David Zalubowski / AP
By all possible forecasts and measures, this holiday shopping season is predicted to break records. In fact, this year’s shopping spree is setting records that not even the Grinch can stop.
Exactly how big is the record?
US shoppers are expected to spend up to $859 billion from month to month, based on National Retail Federation. That number could be 10.5% more than what was spent during last year’s record holiday shopping season.
Furthermore, the NRF expects a giant 4.4 trillion dollars – correct, thousands of billions with one NS – will be fully spent in 2021. In 2020, our procurement peaked at just $4 trillion.
One reason is that this year’s holiday gift shopping starts earlier than ever, boosting retail spending every month since August. However, more people told the NRF that they plan to shop more this important weekend than they did last year and Black Friday. it’s still the day attract the largest number of shoppers.
People are expected to spend an average of $785 on holiday gifts, based on Market research firm NPD Group.
How good are the deals?
Store discounts likely won’t be as deep as in previous years. This year’s returns are attractive, but also expensive for retailers, making them less willing and able to offer discounts.
NS Great resignation retail workers during the pandemic prompted stores to raise wages faster than in previous years. Amazon, for example, revealed that Higher wages and other costs due to a shortage of workers cost the company $2 billion last quarter.
Close the factory and transportation congestion are also expenses for the store. Gap said they are expected to spend $450 million to send supplies by air instead of through difficult ports. It forecasts up to $650 million in lost revenue due to supply chain disruptions.
What about inflation and higher prices?
We are seeing the strongest inflation increase since 1990, according to data of the Ministry of Labor from October. And in surveys, people say this really worries them: Consumer sentiment is at lowest level in 10 years. But then they keep shopping – and pay higher prices.
This is really unusual; Consumer sentiment often moves in sync with spending. But for now at least, inflation worries haven’t deterred holiday shoppers.
“I think people are worried, but it’s a fear of the future,” said Akshat Goel, economist at data and analytics firm IHS Markit. Goel also points out that by far some of the biggest bulls have been in food and gasand those are usually not on anyone’s gift list.
Besides, he added, this holiday will set a spending record even when adjusted for inflation. In fact, the increase in spending throughout 2021 is a major reason behind the tie-up at ports and ports. shipping logjams.
After 2020, a year of canceled trips, postponed weddings, and skipped summer camps, many people head into 2021 ready to spend. Federal pandemic aid has given a big boost to bank accounts, boosting spending levels into the New Year holiday.
As NRF Chief Economist Jack Kleinhenz put it, “Consumers are … spending because they can.”
