Retail in 2020 is no ‘holiday’

The coronavirus pandemic is creating novel hurdles for Americans’ spending this holiday season, posing potential challenges for an economy that leans heavily on their willingness to consume.

Households face the prospect of Halloween without trick-or-treaters, Thanksgiving without family travels, Black Friday without crowds, and a December without parties and in-person gift-giving. Congressional deadlock over fresh fiscal aid for the millions unemployed and a contentious presidential election campaign are also potential dampers on this year’s cheer.

Holiday sales — usually spanning November and December — represent roughly 20 percent of annual US retail sales each year, according to the National Retail Federation. And retail spending accounts for about 25 percent of consumer spending in a typical year.

A number of economists are predicting little or no growth this year compared with 2019. RSM US chief economist Joe Brusuelas expects retail sales to increase just 0.5 percent this holiday season — partly because Congress hasn’t passed a new stimulus package.

Sucharita Kodali, a retail-industry analyst at Forrester Research, expects retail spending this holiday season to be flat compared with 2019. Although she predicts online sales will grow by 20 percent to 25 percent, the sharp decrease in foot traffic at brick-and-mortar stores is expected to keep overall spending in check this November and December.

This year’s outlook is so unpredictable that some forecasters aren’t even making predictions. The National Retail Federation has delayed the release of its holiday forecast for the first time in decades, citing a lack of clear economic indicators and other variables, including the presidential election and a possible resurgence of COVID-19.