As predicted by economists, consumers spent big during the 2021 holiday season with retail sales up 14.1% year-over-year. Growth exceeded the 10.5% estimate made in October by the National Retail Federation.
Sales, excluding autos and restaurants, totaled $886.7 billion, with online sales accounting for 24.6% of the total. Online sales totaled $218.9 billion, up 11.3% from a year earlier.
“We ended the year with exceptional annual retail sales and a record holiday season, which is a clear testament to the power of the consumer and the ingenuity of retailers and their employees,” said President and CEO. NRF management, Matthew Shay. “Despite supply chain issues, rising inflation, labor shortages and the omicron variant, retailers delivered a positive holiday experience for pandemic-weary consumers and their families. “
Shay said consumers were buoyed by high wages and record savings and started shopping earlier this year than ever before.
“The numbers are clear: 2021 has been an undeniably exceptional year for retail sales,” Shay added.
Holiday sales reported by NRF are from November 1 and December 31, 2021. December sales were down 2.7% from November, but up 13.4% from December 2020. In December, sales were up 13% unadjusted year over year. year on a three-month moving average, reports the NRF.
“Retail sales showed strong momentum throughout the holiday season,” said NRF chief economist Jack Kleinhenz. “Concerns about inflation and COVID-19 pressured consumer attitudes but did not dampen spending, and sales were remarkably strong. Although many consumers started shopping in October, these are the strongest November and December we have ever seen.”
Kleinhenz said holiday spending in 2021 reflected continued consumer demand driving the economy and is expected to continue into 2022.
“Nevertheless, we must be prepared for challenges in the coming months due to the substantial uncertainty brought by the pandemic,” he added.
Inflation helped fuel total consumer spending, with the consumer price index rising 7% in December, reflecting rising cost of goods in 2021. The US Department of Commerce said the index of 7% in December was the largest 12-month increase since the end of the period. June 1982. Excluding food and energy, the index rose 5.5%, the largest 12-month change since the period ending February 1991. The energy index rose 29, 3% over the past year, and the food index has increased by 6.3%.
The US Spending Momentum Index (SMI) had a reading of 108.4 in December, according to Visa. The monthly reading was 110.3 for the three months ending in December. Visa said as the SMI rises above 100, consumer spending momentum strengthens.
Economists at Wells Fargo Securities said inflation is intensifying and consumer activity is cooling as 2022 begins. The NFIB Small Business Optimism Index reached 98.9. Industrial production fell 0.1% as supply constraints dampened manufacturing output. Consumer sentiment fell to 68.8 in January, the first solid sign that the Omicron push is weighing on economic activity, Well Fargo economists reported on Jan. 14.
Here’s the growth in holiday retail sales by category, according to NRF.
Clothing and clothing accessories stores, up 33.1%
Sporting goods stores, up 20.9%
General merchandise stores, up 15.2%
Furniture and home furnishings stores, up 15%
Electronics and appliance stores, up 13.8%
Building and garden supply stores, up 13.5%
Online and non-store sales up 11.3%
Health and personal care stores, up 9.6%
Grocery and beverage stores, up 8.6%