Will Retail Sales Continue to Climb? Survey Says: ‘Yes’
From revenge shopping to accelerated plans for travel on the horizon, a growing number of vaccinated consumers may be gearing up to give retail strong months ahead.
According to new research by Pitney Bowes, U.S. consumers alone are set to increase spending by 9 percent this summer compared to summer 2020, with Gen Z and Millennials, in particular, expected to spend approximately 15 percent more on average across all categories.
With a possible bright light at the end of the tunnel for the retail market in sight, WWD asked top retail consultants if they are predicting retail sales in the second half to be about the same as last year, better than last year or worse than last year. Overwhelmingly, consultants said, things are looking up.
Jill Standish, senior managing director and global head of Accenture’s retail industry group:
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Antony Karabus, chief executive officer at HRC Retail Advisory:
Antony Karabus, chief executive officer at HRC Retail Advisory. Courtesy image
Prediction: Better than last year.
“Given the strong progress made with vaccinations and more than 70 percent reduction in COVID-19 cases and deaths since peak, consumers are increasingly comfortable shopping in stores. With the U.S. likely back to normal life and routines — including travel, entertainment, restaurants — by Q3, we expect the pent-up consumer demand for apparel, accessories, footwear, home and other adjacent categories to produce an excellent second half of 2021 for retailers. The combined lingering effect of the stimulus payments, a large number of jobs to be filled and the trillions in savings amassed by US consumers since the start of the pandemic will all augur well for retailers in the key second half of 2021.
“HRC Advisory is very bullish on retail in 2021. The vast majority of retailers we work with and speak to are experiencing a strong 2021.”
David Bassuk and Joel Bines, global coleaders of the retail practice at AlixPartners:
David Bassuk and Joel Bines, global coleaders of the retail practice at AlixPartners. Courtesy Image.
Prediction: Better than last year.
“We expect second-half sales to moderate somewhat from the significant strength we have seen year-to-date, but still to be above 2020 levels. This will be driven by the continued benefit consumers are seeing from the stimulus and a shift back to more physical and in-person activities. However, demand will not be equal, as we expect some ‘remote-friendly’ categories, like office and home, to wane a bit in favor of others, like apparel and footwear. Overall, hold onto your hats — we are about to enter some truly uncharted waters.”
Rod Sides, vice chairman and U.S. retail and distribution leader at Deloitte LLP:
Rod Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader at Deloitte. Courtesy Image
Prediction: Better than last year.
“We expect retail sales in 2021 to exceed sales in 2020. However, the economy has probably already experienced the greatest part of the growth in retail sales this year. During the pandemic, consumers ramped up spending on goods, especially durable goods — which last longer than three years — at the expense of services such as travel, entertainment and restaurant meals. As the impact of the pandemic wanes with the vaccine roll-out, consumers are likely to switch spending back toward services. Therefore, the robust economic recovery we expect over the next few quarters may be accompanied by surprisingly weak retail sales.”
Lara Koslow, head of Boston Consulting Group’s Center for Customer Insight:
Lara Koslow, head of BCG’s Center for Customer Insight. Courtesy Image.
Prediction: Better than last year.
“Roaring consumer spend with rising consumer confidence and pent-up demand will fuel better retail sales in the second-half of 2021 — but some consumers will be left behind. We are seeing a two-speed recovery emerging as mid- to high-income consumers saved more during COVID-19, and those with household incomes of greater than $60,000 also regained employment losses which is giving them comfort to spend. However, low-income consumers may see continued employment and wage challenges. This income insecurity may limit spend recovery and delay or dilute the impact of any added government stimulus for this group.”
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