Elgin Area Chamber Of Commerce: Holiday Shopping Season Could Set Records With Forecasts Of Pent-Up Demand

Elgin IL

30 November, 2021

2:31 AM

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Press release from the Elgin Area Chamber of Commerce: November 29, 2021 By Linda Moss and Andria Cheng CoStar News   This year consumers started shopping earlier for the holidays, momentum that's expected to carry through the season, with retail brokers and analysts forecasting that spending could reach records. Despite concerns about supply-chain disruptions, holiday-shopping surveys are offering bullish outlooks for retailers for the rest of 2021, a year after foot traffic at stores was suppressed around Christmas and Hanukkah by the COVID-19 outbreak. The National Retail Federation, which calls itself the world's largest retail trade association, in its annual holiday forecast predicted sales during November and December will increase 8.5% to 10.5% over the same time in 2020 to between $843.4 billion and $859 billion. Those estimates — which exclude automobile dealers, gas stations and restaurants — compare with a high of $777.3 billion in 2020. In turn, real estate brokerage JLL released a survey that found consumers will spend 25% more this year during the holidays than last year, while ICSC, the major retail real estate trade organization, sees sales rising about 9%. "Holiday sales are forecast to be very strong, growing as much as 10.5% over 2020" and driving historical records, said Barrie Scardina, head of retail, Americas, at Cushman & Wakefield. "A strong stock market combined with consumers saving during the pandemic is driving consumer spending. ... We believe 2021 will be a happy holiday season for retailers and lead to strong retail real estate activity in 2022." The NRF is slated to release its analysis of sales during the five-day holiday shopping period, spanning Thanksgiving Day through Cyber Monday, on Tuesday, Nov. 30. Sweet Shopping Revenge Overall, JLL anticipates what it described as "revenge shopping," or consumers making up for the spending they missed out on during the pandemic by jacking up their holiday-gift budgets. "We expect to see a huge jump in shopper demand this holiday season," Naveen Jaggi, JLL's president of retail advisory services, said in a statement. "Many malls are planning to return to traditional holiday experiences with decorations and experiences, such as pictures with Santa and Christmas present-wrapping stations, so we can expect a large crowd of consumers to return to in-person shopping." The industry does face headwinds, problems that have been making headlines for weeks if not months. Goods are stranded in some ports globally, and retailers are lamenting a lack of workers for their establishments. Some retailers have reported problems from supply-chain disruptions. Clothing seller Gap, department store Nordstrom and electronics seller Best Buy said they were adversely affected by delays in getting goods shipped to their retail outlets. "The holiday will certainly have its challenges," Scardina said. "We have all been following the supply-chain issues and the labor shortage." The predictions of robust holiday sales have already received some validation by recent developments. The U.S. Commerce Department earlier this month reported that retail spending was up 1.7% in October, showing that shoppers are opening their wallets despite rising inflation. And during their third-quarter earnings calls, retailers such as Walmart, Target, Macy's and Kohl's and mall landlords such as Simon Property Group and Macerich reported sales gains over last year leading into the holidays. Despite the logistics snafus, a number of retailers — including Walmart, Target, Macy's and off-price chain Burlington Stores — have told Wall Street analysts they've taken steps to secure their merchandise deliveries, like chartering their own cargo ships, and will have inventory on shelves for shoppers. Anecdotally, the weekend before Thanksgiving, Scardina said she visited The Shops at Riverside Square in Hackensack, New Jersey, and Westfield Garden State Plaza in Paramus, New Jersey, and both malls were busy. "There are people out there shopping," she said. Starting Early Prognosticators were anticipating strong retail sales performance right after Thanksgiving as well as during the full holiday season, even though some consumers started shopping for gifts in October and November this year because of fears that merchandise wouldn't be available and instead stuck in ports globally. Retailers such as Walmart were confident enough to stay closed on Thanksgiving Day, which at one time served as an early kickoff to Black Friday, with some chains offering "doorbuster" sales to lure in shoppers. In fact, Target CEO Brian Cornell told his employees the chain would permanently be keeping its doors closed on Thanksgiving Day. Instead, this year retailers offered what are essentially "early-bird" Black Friday sales, in some cases far in advance of Thanksgiving and stepped up the week of the holiday. In New York's SoHo neighborhood on the Monday afternoon before Thanksgiving, the holiday spirit was palpable as throngs of shoppers could be seen on the main corridor on Broadway, enlivening the street on what is typically a quiet weekday. While stores from the Timberland shoe chain to Italian lingerie shop Intimissimi attracted shoppers to their weeklong Black Friday sales, some others drove crowds without any help of holiday sales. For instance, Canadian fashion label Aritzia, Japanese clothing chain Uniqlo and U.S. shoe chain Steve Madden each drew a steady flow of shoppers while a line waited outside in the wintry air to enter luxury label Prada's store. Anne Brown was one of the shoppers visiting SoHo with her daughter. On their annual holiday shopping trip to New York at this time of the year from Worcester, Massachusetts, Brown said they paid full price for the clothes in about eight shopping bags in their hands, from labels including Aritzia, North Face, Lululemon and Zara. In a hopeful sign for brick-and-mortar retailers, even with increased online shopping, Brown said she still prefers to do most of her clothes shopping in person. "Technology [items] you can order online," she said. "Clothing-wise, it's nice to see and feel." Ahead of the Crowd While shoppers like Brown still enjoy the thrill of the traditional in-person shopping on Black Friday itself, others are taking advantage of the extended sale period to get a head start on deals and avoid crowds. For instance, on the Monday before Thanksgiving at a Best Buy store on Broadway just north of SoHo, a father and son were loading two 75-inch Vizio TVs — each on sale for $1,000 from $1,300 as part of the electronics retailer's Black Friday deals — into their van. Farther north at Macy's flagship in Herald Square, Claudia Mendez, who lives on the Upper West Side, was checking out some clothes that were marked 50% off as part of the department store's Black Friday promotions. Mendez said she decided to come to the store because she was in the area and received an email and coupons from Macy's pitching the idea she could shop before everyone. "I never go out shopping on Black Friday because it's a lot of people," she said. "Now you have a week. It's less crowded." But the experience and the deals to her weren't enticing enough to justify making the trip in person. "I'm not impressed" with the prices, Mendez said, adding some of the clothes on sale were out-of-season merchandise. "It's not that exciting," she said. "You save a couple of dollars. ... I just buy online. Technology now helps you not to go out, and it's cold." Shopping Season Kickoff Scardina cited a survey by the NRF that predicted two-thirds of consumers would do some holiday shopping over Thanksgiving weekend, with most of them shopping on Black Friday. And almost two-thirds of those planning to shop on Black Friday planned to do it in person, according to the NRF. Throughout the holiday season, "we still believe people will show up at the malls and there are going to be great deals, and I don't think retailers are going to disappoint," Scardina said. U.S. consumers planned to spend $108.5 billion over Black Friday and Cyber Monday weekend, according to a survey recently released by ICSC. On average, projections called for shoppers to spend $491 over the course of the weekend, according to the trade group. "The holiday shopping season started early this year," ICSC President and CEO Tom McGee said in a statement. He added that consumers are looking "for deals and prioritize getting the best price on their purchases." On Thanksgiving Day, 49% of those planning to do some shopping expected to do so at physical stores and 51% planned to only shop online, according to the ICSC survey, while an NRF survey found 65% planned to do so in stores. On Black Friday, 73% of shoppers that day planned to shop either online or in-store. Cyber Monday is expected to have 81% of those shopping that day making their purchases online, the ICSC survey found. "The holidays are about spending time with family, friends and loved ones and people are craving being together more than ever after the COVID disruptions of the past year and a half," McGee said. "While shoppers will buy online from their homes, they will undoubtedly also take advantage of in-person shopping." JLL's holiday survey found that more than 50% of consumers said they expected to shop on Black Friday and Cyber Monday. Another recently released holiday-spending forecast offered an upbeat outlook. Mastercard SpendingPulse, anticipated U.S. retail sales during Thanksgiving week rising 10% year over year and 12.2% over 2019, excluding autos and gas. "Holiday lights are shining bright for retailers this year," Steve Sadove, senior adviser for Mastercard and former Saks Inc. CEO and chairman, said in a statement. "The consumer is strong and spending. With discounts in short supply, product innovation, availability and sustainability will be deciding factors for consumers eager to cross off their holiday shopping lists." Source: www.CoStar.com This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author's own.