Concerns over omicron could shift spending away from experiences, retail trade group says
- National Retail Federation CEO Matt Shay said Tuesday that the new coronavirus variant could direct more dollars toward electronics, toys, apparel and other items instead of vacations and movie tickets.
- News of the omicron strain came during a key time for holiday shopping.
- The trade group reiterated its forecast of between $843.4 billion and $859 billion of sales in November and December, which would represent an all-time high in holiday spending.
As Americans bought gifts during the peak Thanksgiving shopping weekend, the discovery of the omicron variant made headlines and prompted action by public health officials.
National Retail Federation CEO Matt Shay said Tuesday that the coronavirus strain could shake up spending patterns this holiday season and direct more dollars toward electronics, toys, apparel and other items instead of vacations and movie tickets.
"We know, unfortunately, that when the variants have had a real impact on the economy, the goods side of the economy has actually benefited from that because people change behavior away from the experience side of the economy and spend more time and more dollars engaged in the goods side of the economy," he said on a call with reporters.
Holiday sales are expected to grow to an all-time high of between $843.4 billion and $859 billion of sales in November and December, which represents growth of 8.5% to 10.5% this year, according to the National Retail Federation. The trade group reiterated its rosy forecast for the holiday season on Tuesday.
Experience-based gifts — such as travel vouchers, restaurant gift cards and spa days — are expected to make a comeback this year as more Americans feel comfortable getting out again.
About 43% of consumers said they were planning to splurge on experiences and service gifts this holiday season, according to a survey of roughly 1,500 U.S. consumers in August by consulting firm Accenture. The trend was more pronounced among younger generations, with 53% of millennials and 50% of Gen Z saying they were planning to spend on experiences, the survey found.
Shay said the trade group feels confident about consumers' appetite to spend, despite the new variant. He said the backdrop of the pandemic looks very different this holiday season, since more Americans are fully vaccinated.
"We think there's a reason to be aware, a reason to follow the kinds of protocols we have been following all along about safe practices and getting vaccinated, but there's not a reason to panic," he said.