Holiday Sales Shot Up 8.3 Pct In 2020
Despite the ongoing pandemic, retail holiday sales were 8.3 percent higher in 2020 than in 2019, surprising even the National Retail Federation (NRF).
The 8.3 percent jump was double the 3.5 percent average yearly increase the sector had seen over the past five holiday seasons. Last year, holiday sales jumped 4 percent year over year.
“Despite unprecedented challenges, consumers and retailers demonstrated incredible resilience this holiday season,” said NRF President Matthew Shay in a statement.
“Faced with rising transmission of the virus, state restrictions on retailers and heightened political and economic uncertainty, consumers chose to spend on gifts that lifted the spirits of their families and friends and provided a sense of normalcy given the challenging year. We believe President-elect Biden’s stimulus proposal, with direct payments to families and individuals, and further aid for small businesses and tools to keep businesses open, will keep the economy growing,” Shay added.
The NRF said 2020 retail sales from Nov. 1 to Dec. 31 were $789.4 billion, surpassing its forecast of sales between $755.3 billion and $766.7 billion, or an increase of 3.6 percent to 5.2 percent.
A surge in online shopping also contributed to the sales boost. According to an analysis from Adobe Digital Insights (ADI), online shopping hit $188.2 billion in 2020, a 32 percent increase from 2019.
For the first time, consumers spent over $1 billion each day during the holiday season, a sign that the digital shift is here to stay, although it brings with it a surge in eCommerce returns.
Online and other non-store sales were more in line with NRF estimates, soaring 23.9 percent to $209 billion. The NRF had forecasted a jump of 20 percent to 30 percent, or sales of between $202.5 billion to $218.4 billion. Those numbers exclude sales made at automobile dealers, gas stations and restaurants.
Building materials and garden supply retailers were the big winners this holiday shopping season, with sales shooting up 19 percent over last year. Next up were sporting goods retailers, with sales climbing 15.2 percent. Grocery and beverage retailers saw sales increase by 9.6 percent this year.
On the downside, clothing and accessories retailers saw sales tumble 14.9 percent this holiday season. Electronics and appliance sellers also took a hard hit, with sales dropping 14.4 percent.
The NRF said its numbers were based on data from the U.S. Census Bureau, which reported on Jan. 15 that overall December sales, including auto dealers, gas stations and restaurants, were down 0.7 percent seasonally adjusted from November, but up 2.9 percent unadjusted year over year.
The sector’s better-than-expected performance could be a sign that the economy is recovering, according to NRF Chief Economist Jack Kleinhenz.
“There was a massive boost to most consumer wallets this season,” Kleinhenz said. “Consumers were able to splurge on holiday gifts because of increased money in their bank accounts from the stimulus payments they received earlier in the year and the money they saved by not traveling, dining out or attending entertainment events.
“Some families are still struggling, as are some retail sectors. But the promise of a new round of stimulus checks after a deal was struck before Christmas helped increase consumer confidence. Consumers were also encouraged by the news of COVID-19 vaccines becoming available, which helped offset concerns about increased infection rates and state restrictions on activity,” Kleinhenz added.