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If you felt like people were shopping more during the holiday season you were right, according to data from the National Retail Federation. Sales during 2017 increased by 5.5% when compared to the year before for a total of $691.9 billion. This data includes online sales along with other sales that did not take place in brick-and-mortar stores, with these sales up 11.5%.
This upswing in holiday spending was more than expected by the NRF and represented the strongest gain for retailers since the recession. They suggest that growing wages, along with employment gains and higher consumer confidence led to people shopping more.
“We knew going in that retailers were going to have a good holiday season but the results are even better than anything we could have hoped for, especially given the misleading headlines of the past year,” NRF President and CEO Matthew Shay said.
“Whether they shopped in-store, online or on their phones, consumers were in the mood to spend, and retailers were there to offer them good value for their money. With this as a starting point and tax cuts putting more money into consumers' pockets, we are confident that retailers will have a very good year ahead,” he said.
NRF had already forecast that sales would fall in the $678.75 billion and $682 billion range, which would have represented an upswing of between 3.6% and 4%. The gain that played out in the market is the biggest one since 2010.
They had also predicted that non-store sales would grow to somewhere between 11% and 15%, here sales were in alignment with the forecast.
Unemployment down, confidence up
They point out that unemployment is now at a 17-year low, and that combined a higher level of consumer confidence and other factors may well be the push behind the surge in sales.
The 2017 holiday season actually occurred after three of the strongest monthly year-over-year gains seen in the retail sales market since the last quarter of 2014. “The economy was in great shape going into the holiday season, and retailers had the right mix of inventory, pricing and staffing to help them connect with shoppers very efficiently,” said NRF Chief Economist Jack Kleinhenz.
“Strong employment and more money in consumers' pockets along with the news of tax cuts clearly helped with the pace of shopping. The market conditions were right, retailers were doing what they know how to do, and it all worked. We think the willingness to spend and growing purchasing power seen during the holidays will be key drivers of the 2018 economy,” he added.