Holiday Spending Could Top Projections

Consumers are still in full holiday shopping mode, despite getting an early start on gift buying.

December 07, 2021

Holiday Presents

ALEXANDRIA, Va.—Holiday spending could be 11.5% more this year than last year, according to CNBC, which is much higher than predicted. The National Retail Federation (NRF) projected spending to be between 8.5% and 10.5% higher than last year. NRF said it expects sales in November and December to hit a record high of between $834.4 billion and $859 billion.

Factors such as the omicron COVID-19 variant could change how consumers shop and what they buy. But instead of hampering sales, it could increase them, according to NRF. Instead of buying a vacation or concert tickets, the money could go to buying goods.

“There’s no crystal ball to provide a definitive answer, but the latest data is encouraging and provides useful insights,” said NRF Chief Economist Jack Kleinhenz in a news release. “In fact, the season could turn out even better than we expected.”

This holiday shopping season has been unique with consumers shopping early out of concern for shipping delays and product availability. Inflation has also meant fewer deals for consumers—some of this season’s higher sales will come from inflation, which has raised the prices of many gift items. Retailers, including Macy’s and Kohl’s, said they have less inventory and are seeing higher consumer demand so they can sell more merchandise at full price.

The Thanksgiving holiday shopping weekend was lackluster because many consumers had already begun their holiday shopping—some as early as October. The total number of shoppers and average spending dropped during the extended Thanksgiving weekend compared with each of the past two years, according to the NRF.

However, Kleinhenz thinks shoppers will keep spending, even if they have already bought many gifts. “If you look at what happened last November, we had an early October, and we had a very, very strong November,” he told CNBC. “People are creatures of habit. There’s still a lot of time between now and the holidays.”