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Sales are forecasted to rise between 3.6% and 5.2% from Nov. 1 to Dec. 31, generating between $755.3 billion and $766.7 billion, Matthew Shay, president and chief executive of the nation’s largest retail trade group, said during the company's 2020 Holiday Sales Forecast teleconference.
Online and other non-store sales alone are projected to increase between 20% and 30%, notching between $202.5 billion and $218.4 billion, up from $168.7 billion last year.
This projection, which excludes automobile dealers, gasoline stations and restaurants, marks a potential increase from 2019 when sales increased 4% during the same time frame, generating about $729.1 billion. Over the past five years, holiday sales increased by an average of 3.5%.
Overall, the trade group has an upbeat forecast for the holiday shopping season due to the consumer engagement it has seen over recent holidays marked by the pandemic.
Shay noted that consumers are "looking for opportunities to celebrate" and as a result, responded positively to prior holidays such as Mother's Day, Labor Day and Halloween.
"Consumers have shown they are excited about the holidays and are willing to spend on gifts that lift the spirits of family and friends after such a challenging year," Shay said.
Over the first 10 months of the year, retail sales are up 6.4 % compared to the same time a year ago.
Shay added that the prior engagement seen from consumers is a good indicator of behavior that will be seen through the end of the year.
"We expect a strong finish to the holiday season" Shay noted.
Although not all retailers and categories have rebounded quickly from the virus-related store shutdowns and stay-at-home orders earlier this year, overall "retail sales have seen a V-shaped recovery, growing both month-over-month and year-over-year each month since June," NRF said.
In October, sales were up 10.6% compared to a year earlier, which is likely driven by the early holiday shopping season, according to the NRF.
Shay noted that there were a number of shopping events taking place last month, which is roughly four to six weeks earlier than normal.
However, consumers were "responsive," he said, with over 40% saying that they have started their holiday shopping earlier than normal this year.
NRF chief economist Jack Kleinhenz said reduced spending on personal services, travel and entertainment due to COVID-19–related restrictions have helped to free up money so consumers can part take in holiday shopping.
Although, he remained cautious that any further shutdowns that occur due to rising cases could pose a threat to this growth.
"There are risks to the economy if the virus continues to spread, but as long as consumers remain confident and upbeat, they will spend for the holiday season," Kleinhenz. said.