Inflation is driving up prices, but it is not keeping people out of shops.
What are you saying: Retail sales rose for the third straight month in October – and industry experts say holiday shopping could return this year after last year’s pandemic-induced slowdown.
- “it’s really funny Because you’d expect from some economic data that retail sales would be looking really terrible, but the complete opposite is true,” Neil Saunders, retail analyst and managing director at GlobalData Retail, told me on the Nerdshala Re:Cap podcast.
- The return of a proper holiday season Many Americans have treated themselves after months and months of isolation and stress, he says. “One thing we’re seeing, especially for the holidays, is this kind of attitude that, ‘I deserve to have a good time because things have been so pathetic for the last few years.’ ,
By numbers: The annual rate of inflation reached 6.2% in October – the highest we’ve seen in more than three decades.
- But retail sales jumped 1.7% in October, rising for the third month in a row. and sales are up 21% above pre-pandemic levels, According to the New York Times,
- Krizia Soto-Villanueva of Burlington, Vermont, told the Times she’s having a “retail therapy” moment: “I know prices are going up, but I spent almost two years without spending money on myself. I’m not going to spend.” I’ve been saving all my savings, but if I really need something, I’m not going to hesitate much.”
- In fact, some retailers are doing particularly well right now as are luxury brands. louis vuitton,
Between the lines: Saunders notes that there are a few other reasons why retail is going up-to-right, along with inflation.
- Not all the increase is from people buying more stuff: Higher prices themselves reduce sales numbers, he noted.
- On top of that, the world still hasn’t returned to normal, and people aren’t eating out or going to the movies the way they used to. Some of the cash spent on services is temporarily allocated to goods, Saunders says.
what to watch: Even though shopping is booming, don’t expect Black Friday and Cyber Monday to reach pre-pandemic sales levels. This year’s holiday shopping has already begun, as concerns about supply chain issues have prompted people to buy gifts earlier.
- But Inna Kuznetsova, CEO of market research firm 1010Data, says, “Buying first doesn’t mean spending less. “Consumers are hungry for positive sentiments of in-person celebrations. So we may see increased spending as well as earlier spending.”