2021 holiday sales see the strongest growth in 20 years

The forecast: US holiday retail sales in 2021 will see the strongest growth in more than 20 years, rising 9.0% from last year to $1.147 trillion. This is the fastest growth rate since 1999 when sales rose 10.2% for the November and December period.

Dive deeper: Two factors will drive this growth.

  • More money to spend. Additional stimulus in the form of child tax credits will put money in people's wallets. In early September, families received the third of six tax credits, which could equal up to $300 per child. In addition, savings rates are at 14.2% year-to-date, well above 2019’s 7.6% rate.
  • Pent-up demand. This year has been characterized by strong demand for discretionary products like apparel, luxury, and jewelry goods. Luxury retail and jewelry sectors have been experiencing some of the strongest year-over-year (YoY) sales growth, per a September statement from Mastercard. These products will drive growth this holiday season as people return to social events.

However, inventory and supply chain challenges, along with more spending being dedicated to nonretail sectors (like travel, dining, and entertainment), may affect sales.