Historic Consumer Strength and Retail Ingenuity Will Help Industry Overcome Three Significant Challenges This Holiday Season

The holiday shopping season has begun, and the balance sheets of American consumers are in a very good place. Despite some significant challenges, we are anticipating perhaps the strongest holiday shopping season on record.

Though the pandemic is not yet in the rear view mirror, we are seeing meaningful signs of a much-welcomed return to normal behavior. More Americans are heading back to work and to school, embracing activities long on hold like socializing with friends and family, shopping in-store and taking trips for vacation or work.

Another significant milestone was the lifting of pandemic restrictions on foreign visitors to the United States on November 8. This is great news for our travel and leisure industries, as well as for retail: 85 percent of international visitors tell us that shopping is one of the key activities they engage in when coming to our country. Many of our cities around the country benefit from international travel and tourism. There's a high correlation between international tourists and retail sales, and this is a wonderful time of the year to welcome international travelers back.

This fall, NRF was invited to the UK and Europe to talk about the state of the retail industry and attend in-person events once again. At both the World Retail Congress event in London and Paris Retail Week, we enjoyed the opportunity to interact with people from all over the world about the state of the industry.

We are looking forward to hosting NRF’s annual Big Show this January at the newly renovated Javits Center in New York City. We have an exceptional list of speakers and exhibitors, and we encourage you to join us January 16-18.

As we size up this holiday season and beyond, the most important thing to note is the historic financial strength of American households.

Household net worth, which increased by about $5 trillion in the first quarter, is at an all-time high, reflecting large gains in stock prices and home prices and a high savings rate.?Despite growing inflation concerns, consumer spending is currently far above pre-pandemic levels, as is GDP, thanks to unprecedented monetary and fiscal policies that have backstopped demand and put money into people’s wallets for nearly a year and a half.

This economic strength has translated into strong sales for the retail industry. U.S. retail sales grew almost 7 percent in 2020, the highest rate seen in over 20 years. NRF forecasts retail sales will grow between 10.5 and 13.5 percent to more than $4.44 trillion in 2021.

But the road to full recovery has many formidable hurdles, and there are three issues we are heavily engaged in on behalf of our members:

1. We are closely monitoring significant challenges in the global supply chain.?Worldwide supply chain disruptions from the pandemic have slowed retail imports into the U.S. — though imports are currently at record levels — and are one of the factors driving near-term inflation. NRF is working closely with our members and the Biden Administration’s supply chain task force to find short- and long-term solutions. NRF strongly supported the bipartisan Infrastructure Investment and Jobs Act that President Biden signed into law on November 15.
2. Workforce issues remain a concern for retailers of all shapes and sizes as changes in labor patterns from the pandemic have created labor shortages across the board. Retailers spent billions of dollars to keep their employees safe and rewarded for their efforts during the pandemic. However, there are currently about 1.1 million retail job openings that our members are looking to fill. NRF is actively working to boost recruitment and retention efforts by providing education and resources to bring people into retail.
3. Although we are fully, unequivocally and on record in support of increasing vaccination rates throughout the country, we have expressed deep concerns about the industry’s ability to comply with the Biden’s Administration’s COVID-19 employer-based vaccination and testing emergency temporary standard. The December 6 deadline to provide proof of employee vaccination status and the January 4 deadline for testing unvaccinated employees are both unworkable and virtually impossible. We repeatedly communicated to the Administration our concerns about the practical challenges of meeting those arbitrary targets but were ultimately forced to seek judicial relief to delay the mandate.

NRF is continuing months-long work with our members by hosting meetings between retailers and experts to help the industry prepare for any eventuality should the ETS proceed. Most recently, NRF created an interactive compliance guide for employers to assess their readiness, and we are hosting compliance assistance webinars for small-midsize retailers.

The retail industry’s response to the pandemic is a true success story .?Retailers have invested heavily in adapting their businesses to changing consumer?behavior and the realities of doing business in this challenging environment. We remain optimistic for a record holiday season and continued growth into 2022.