Robinson Analytics Correctly Forecast Christmas / Holiday Spending Down in 2020
I know that it may be hard to remember with all of the political things going on right now, but we have entered the height of the Christmas spending season. Christmas spending last year, 2019, was ~$729 billion. What are we looking at for 2020? Will it rise year-over-year, as it has in the past several years? See chart below.
Take a look at a recent headline (November 29, 2020)
Black Friday shopping in stores craters 52% during pandemic as e-commerce sales surge
Take a look at a recent headline (November 29, 2020)
Black Friday online shopping on track to hit record as holiday shoppers skip stores, Adobe says
Take a look at a recent headline (December 12, 2020)
Almost 40% of Americans plan to spend less this holiday season as the Covid pandemic lingers
Take a look at a recent headline (December 16, 2020)
Retail sales fell 1.1% in November, biggest drop in 7 months
Take a look at a recent headline (January 15, 2021)
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The national retail federation normally puts out a forecast. But they haven’t so far this year. They say that with Covid-19 and the recession, there is just too much noise in the environment to come up with anything stable.
However, I thought I would venture out into the market and develop a forecast of how Christmas spending in 2020 might be in relationship to last year. To do that I conducted a poll. The American public perception is that Christmas spending this holiday season will not be greater than last year. See the chart below.
To get a look at where spending might end up, I took a look at a Gallup study. They are currently estimating that Christmas spending per person will drop from $942 last year to $805 this year. That would be a -14.5% YoY drop. That seems a little drastic to me. See the chart below.
For example in 2009, we saw a drop of -4.6% YoY. We do have ~8 million people still out of work (see chart below), so I do believe Covid-19 and the recession we went through this year will have an impact.
My estimate for 2020 Christmas spending is that spending will most likely be down over 2019. My best estimate is that spending will be down between -3.7% ($702 bn) and -18.6% ($593 bn) with a point estimate of -8.6% ($667 bn). So the implications are that retailers should prepare for a lower level of sales overall this Christmas / Holiday season.
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