Retailers could end up having a strong finish to 2020, despite the challenges dealt them by the COVID-19 pandemic, says a recent US National Retail Federation forecast.
The US 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 while holiday sales on average have increased 3.5% for the past five years.
Online and other non-store sales are forecast to jump 20% to 30%, amounting to between $202.5 billion and $218.4 billion, compared with $168.7 billion in 2019, according to NRF.
“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 sales forecast excludes automobile dealers, gasoline stations and restaurants.
The forecast from the retail industry’s leading trade group, which normally releases its expectations in early October, was delayed by uncertainly surrounding the coronavirus crisis.
It’s not all good news. The possibility exists that sales could be hurt by an ongoing spike in infections and deaths. Unemployment remains high, and some states have once again begun to close restaurants and implement other restrictions that could result in further furloughs or layoffs.
Hope surrounding the distribution of an effective COVID-19 vaccine has suddenly sparked more optimism, however.
Ahead of NRF’s forecast, shares in companies such as Gap, Express, Nordstrom, Macy’s, and the mall owner Simon Property Group were on the rise. The release of the forecast fueled a further rally.
Investors are hoping 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 chain is planning for a gradual improvement in its business in the latter half of 2021 based on the impact of a vaccine. Nevertheless, he said, the retailer also has another scenario “that would suggest that we don’t have the vaccination that’s scalable.”
With Black Friday just four days away, surveys show Americans remain anxious about going to stores to shop. More than ever are planning to buy online while a survey from NRF earlier this month found 42% of consumers had started their holiday shopping earlier this year than they normally do.