Creighton University News Release
OMAHA-Even though unemployment hit a record high this year due to the COVID-19 pandemic, Creighton University economics professor Ernie Goss, Ph.D., still expects a decent holiday shopping season with 2 to 3% overall retail sales growth. The e-commerce sector of the retail industry will continue to dominate sales this year with Goss forecasting online sales to be approximately 25 to 30% higher than last year.
Goss, an economist at the Creighton Heider College of Business, conducts two monthly economic surveys across Midwest states that provide leading indicators on the strength of certain sectors of the U.S. economy. He says there are a few trends and buying habits that will impact holiday sales:
Less spending on gifting experiences and travel – Gifts of services and experiences such as health club memberships and vacations were an emerging trend last year. Goss expects consumer spending to shift to retail purchases this holiday season, due to COVID-19. He anticipates an increase in spending on products that will enhance the home, such as home entertainment devices, office products and gym equipment.
A rebounding economy – The GDP growth rate for third quarter, which measures the pace of economic growth, was the strongest it has been since World War II. Goss says this will signal economic growth, which could strengthen if economic lockdowns due to COVID-19 are lifted. This would help the struggling hospitality, leisure and travel industries that are currently operating well below breakeven as they operate at a fraction of capacity. However, if economic lockdowns are more broadly implemented due to the increase in COVID-19 cases, significant economic damage will be inflicted on retailers, particularly smaller ones.
Supporting local businesses – Locally owned businesses are fundamental to overall local, regional and national economic growth. Many are trying to stay afloat since less consumers are shopping and dining in public due to coronavirus concerns. As a result, many establishments are trying to stay competitive and accommodate consumers by offering online ordering or curbside pickup. In addition, businesses that received COVID-19 assistance from the government have been holding onto hope for a vaccine. Without one, Goss expects an uptick in closures and bankruptcies in the first quarter of 2021.
Increase in personal savings – According to the National Retail Federation, holiday shoppers plan to spend $998 on average on items such as gifts, food and decorations this year. Goss says many Americans stashed their government stimulus check into savings rather than spending it, which could promote additional holiday spending. In fact, during the pandemic, the savings rate went from 2 to 3% to 28%. Goss encourages consumers to spend what they can, but not what they can’t afford. He also expects that Americans will receive another stimulus check, but that may come after the holiday season.
Hiring headaches ‒ In retail, individuals will see longer lines due to company cutbacks and less holiday staffing. Though some companies will ramp up hiring to keep up with the holiday rush, Goss says finding and hiring qualified workers remains an economic impediment according to Creighton's surveys over the past several months.
For more information from Dr. Goss, please visit https://business.creighton.edu/about/media-resources/ernie-goss-phd.