Holiday retail sales rose a stronger-than-expected 8.3 percent from 2019, or $789.4 billion, according to data released by the National Retail Federation on Friday. The pandemic was a time when consumers turned to gift-giving as a way of cheering themselves up. These numbers include non-store sales and online sales which increased 23.9 percent to $209 billion. The forecast of the NRF stated that sales for 2020 holiday season (which it defines as November 1 through December 31) would rise between 3.6 percent to 5.2 percent year over year, to a total of $755.3 billion and $7666.7 billion. Online sales were expected to rise between 20 percent-30 percent to $202.5 billion to $218.4 trillion. These numbers do not include automobile dealers, gas stations and restaurants. The holiday season growth of 8.3 percent was more than twice the average holiday rise of 3.5 percent over the five previous years, which includes 2019’s 4 per cent gain.

Jack Kleinhenz, NRF Chief Economist, stated that consumers switched into high gear in December. This gave the 2020 holiday season an impressive finish. This could be a positive sign for the economy’s recovery.

Kleinhenz stated in a statement that there was a significant boost to consumer wallets this holiday season. Consumers were able to spend more on holiday gifts due to the increased funds in their bank accounts earlier in the year, as well as the money they saved by not dining out or traveling.

Kleinhenz said that holiday spending increased in the third and fourth week of December after it was too late for online orders to be delivered by Christmas. The majority of consumers made quick trips to the stores to take advantage of the new services that retailers offer, such as buy online, pick-up in-store/curbside.

Total Retail’s View: This is a welcome development after a challenging period for retailers. This shows that consumers continue to shop despite the economic difficulties caused by the coronavirus pandemic. Matthew Shay , NRF President and CEO, stated that despite the fact that the virus was spreading rapidly, there were restrictions placed on retailers and increased political and economic uncertainty. He also said that consumers chose gifts that would lift the spirits of friends and family and provide a sense of normalcy in the midst of a difficult year.

Shay predicts that President-elect Biden will continue to deliver the good news, with his stimulus proposal. This includes direct payments to families, individuals, additional aid for small businesses, as well as tools to keep businesses open.

According to The Washington Post , the President-elect Biden announced Friday that he is putting together a multitrillion-dollar relief program. It would increase stimulus payments for Americans up to $2,000 and extend unemployment insurance. In addition, it would send billions in aid to cities and state governments. The package will include billions in dollars to improve vaccine distribution, tens to millions of dollars for schools, and rent forbearance, and assistance for small businesses, particularly those from low-income communities.

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Source: https://www.mytotalretail.com/article/nrf-2020-holiday-retail-sales-grew-8-3/

American Eagle Outfitters will Close 250 Mall-Based Shops

American Eagle Outfitters, a teen apparel retailer has announced plans to close hundreds more stores over the next few years. It also intends to expand its lingerie and activewear brand Aerie from a $1 billion business to $2 billion. Mike Mathias, Chief Financial Officer of AEO, stated during a virtual meeting that the company, which operates between 200-250 mall-based stores and has approximately 880 stores, plans to close as many as 250 locations over the next two to three years. It plans to increase the number of Aerie shops by 50 to approximately 400 at the end 2021 and to have 500 to 600 Aerie locations by 2023.

Total Retail’s View: This news is consistent with the trends we have seen over the past couple of years in the industry. Specialty apparel brands and traditional retailers have sought to reduce their footprint in shopping malls and redirect their investments towards growing their digital businesses. The COVID-19 pandemic has only exacerbated this trend, as more people prefer to shop online than in stores. American Eagle is cutting costs with its name brand and increasing its profits with Aerie, its profitable activewear and lingerie brand. This strategy is well thought out and, if it succeeds, will result in a healthier company with Aerie driving AEO forward.

Source: https://www.mytotalretail.com/article/american-eagle-outfitters-to-close-up-to-250-mall-based-stores/