US consumer retail spending on general merchandise ended the year up 15% compared to 2020, with a 6% increase in unit sales. While the holiday shopping brought positive retail results, the early part of the year delivered more significant year-over-year gains. The fourth quarter of 2021 contributed 9% revenue growth and 1%-unit growth over the prior year, according The NPD Group.
Beyond comparisons to the most challenged retail months in 2020, gains in the early part of 2021 were further boosted by the government stimulus payments and students returning to the classroom. Each of the first two quarters of the year grew by double digits. Combined they represented almost two-thirds of the growth for the year. Nearly 40% of the entire year’s revenue growth came in March and April 2021. While the fourth quarter accounted for just 20% of the year’s gains, compared to 30% in 2020.
Overall, holiday retail sales were not hindered by the various headwinds at play. Inventory concerns drove consumers to embark on holiday shopping earlier, but neither early shopping nor supply issues impeded late-season shopping. While experiential spending slowly returned, consumers continued to spend on products that supported the continuation of many at-home pandemic-lifestyle behaviours, especially as COVID-19 case counts surged again in late December. However, unit growth was significantly softer than dollar gains through most of the 2021 holiday season, fuelled by elevated average prices.
Enterprise Times: What this means for business.
US retail sales were strong over the holidays, with spending rising over both 2020 and 2019. During the extended holiday season in 2021, some core assumptions about the kind and size of retail growth were exceeded. There appears to be strong momentum leading into the first quarter of 2022. Even so, the nature of the ongoing COVID-19 pandemic means the cadence of retail sales will be far less predictable than in the past. Brands and retailers need to be nimble, not only to prepare themselves for the coming year. They have to understand some of the key trends taking place in the market, as described in NPD’s research.