Consumers are sitting on billions if not trillions of dollars in savings accrued during the pandemic.
Consumer savings could make for a healthy holiday shopping season. With restrictions on travel, dining and in-person shopping this year, consumers have accrued billions if not trillions of dollars during the pandemic. RetailSpaces brought retail industry leaders together virtually for The Rollout Event to discuss expectations for the holiday shopping season, and unanimously, participants held a bright outlook.
The conversation included Tom McGee, president and CEO of ICSC; Matt Boss, head of consumer products at TD Bank; and Rob Almond, CEO of NEST, and each believed that pent-up demand and consumer capital will drive increased spending this year.
“Consumers are sitting on billions if not trillions of dollars. Since March, if you look at the total deposits between consumers and small business, you would estimate that they are up somewhere between $1.5 trillion to $2 trillion. Retail sales in home furnishings, toys and those types of products are doing exceptionally well, and you are seeing some of that physical spend start to come back. So, I do think that there are reasons for optimism,” Boss said.
Excess capital will help achieve a nearly 2% increase in sales this year, according to McGee. “ICSC is forecasting what I will call a solid holiday season. We are forecasting 1.9% growth year-over-year. Given the demand that is there, I believe that once we get past the pandemic, there will be truly robust demand,” he said.
National Retail Federation is also expecting a strong holiday season, particularly for online retailers. The organization is expecting a 3.6% to 5.2% increase in retail sales in November and December. Online and non-store retailers are expected to drive the growth, with sales for the segment projected to grow 20% to 30% this year.
Many retailers have adapted quickly to the pandemic and changing consumer needs, helping to create a shopping-friendly environment. “We are making sure that our customers are doing the right things so that the consumer feels good about walking back into those stores. Retailers have seen increases in sales that they didn’t expect, and that made us feel good knowing that once people felt safe, they were going to walk back into those stores,” said Almond.
The holiday shopping season is only beginning, but already retailers have seen an increase in foot traffic. “This holiday season will be longer than other holiday seasons for a variety of reasons. Retailers are encouraging shoppers to get out earlier,” said McGee. Almond added, “Our customers are telling us that they are seeing more foot traffic than expected, which tells us that people want to get out and shop.”
Source: Globe St.