Historic Consumer Strength and Retail Ingenuity
Updated: Dec 1, 2021
LinkedIn | November 23, 2021
NRF President and CEO, Matthew Shay, discusses consumers and the holidays.
The holiday shopping season has begun, and the balance sheets of American consumers are in a very good place. Despite some significant challenges, we are anticipating perhaps the strongest holiday shopping season on record. Though the pandemic is not yet in the rear view mirror, we are seeing meaningful signs of a much-welcomed return to normal behavior. More Americans are heading back to work and to school, embracing activities and socializing with friends and family, shopping in-store and taking trips for vacation or work.
Another significant milestone was the lifting of pandemic restrictions on foreign visitors to the United States on November 8. This is great news for our travel and leisure industries, as well as for retail: 85% of international visitors tell us that shopping is one of the key activities they engage in when coming to our country. Many of our cities around the country benefit from international travel and tourism.
Also notable, household net worth, increased by about $5 trillion in the first quarter, an all-time high, reflecting large gains in stock prices and home prices and a high savings rate. Despite growing inflation concerns, consumer spending is far above pre-pandemic levels, as is GDP, thanks to unprecedented monetary and fiscal policies that have backstopped demand and put money into people’s wallets for nearly a year and a half. This economic strength has translated into strong retail sales, growing almost 7% in 2020, the highest rate seen in over 20 years. NRF forecasts retail sales will grow between 10.5% and 13.5% to more than $4.44 trillion in 2021.
But the road to full recovery has many formidable hurdles, and there are two issues retailers are heavily engaged in:
1. Worldwide supply chain disruptions from the pandemic have slowed retail imports into the U.S. and are one of the factors driving near-term inflation.
2. Workforce issues remain a concern for retailers of all shapes and sizes as changes in labor patterns from the pandemic have created labor shortages across the board. With about 1.1 million retail job openings that NRF members are looking to fill. NRF is actively working to boost recruitment and retention efforts by providing education and resources to bring people into retail.
The retail industry’s response to the pandemic is a true success story. Retailers have invested heavily in adapting their businesses to changing consumer behavior and the realities of doing business in this challenging environment. Retailers remain optimistic for a record holiday season and continued growth into 2022.