Despite Covid, Holiday Retail Sales Beat Expectations Handily, the NRF Says

The numbers are in, and it turns out the holiday shopping season was not only better than expected, but also better than the one in 2019, weeks before the coronavirus pandemic struck in the United States.

Retail sales in November and December totaled $789.4 billion, up a healthy 8.3% over the same months the year before, the National Retail Federation reported Friday. That volume includes online transactions, where volume rose nearly 24% to total $209 billion.

The performance handily beat the NRF’s forecast for the two months, which called for a rise between 3.6% and 5.2% over 2019. But the trade group’s projection for online sales, which it said would increase between 20% and 30%, proved accurate. In its projections and actual reporting of retail volume, the NRF excludes auto, gasoline, and restaurant sales.

Credit for the bigger-than-expected boost in the holiday period goes to the government stimulus program earlier in the year and consumer savings from restrictions on travel and dining out, the NRF said. And the arrival of a second round of stimulus has boosted consumer confidence, the trade group says. “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,” said NRF chief economist Jack Kleinhenz, in a statement.

Another factor, according to the NRF analysis, was the buy online/pick up in store service many retailers adopted as the pandemic set in. The services required these stores for the first time to coordinate e-commerce sales with local-store product availability, but allowed customers to pick up their merchandise curbside.

The biggest year-over-year holiday-season gainer among retail categories was building materials and garden supply, which soared 19%. At the other end of the spectrum was clothing stores, which saw a 14.9% drop. All told, six out of nine retail categories chalked up gains.

Despite the bigger-than-expected holiday-season boost, though, the last months of 2020 showed slowing momentum as infection rates continued to rise. December’s sales were down 1.6% from November, which in turn had dropped 0.9% from October.