Retail sales climb despite inflation, supply chain costs

(CNN) – Disrupted supply chains are leading to shortages and inflation is making everything more expensive. But those conditions aren’t standing in the way of holiday shoppers who have already started their spending sprees.

It’s been a blockbuster season for retailers. Sales rose by 1.7% just last month, beating expectations.

Bill Boltz with Lowe’s said, “The consumer is shopping earlier and they’ve been shopping earlier. And we think that they’ll continue that pattern throughout the holiday season.”

The biggest shopping day of the year is still Black Friday. But Lowe’s has been running sales since October, trying to capitalize on the 46% of shoppers who plan to buy earlier than normal this year.

Katherine Cullen works with the National Retail Federation. She said, “We’re seeing consumers really move up their holiday shopping timeline, not just for this historical trend, but also because of some concerns around supply chain disruptions and inventory issues.”

And there’s no indication 30-year record inflation is stopping shoppers from spending.

Cullen said, “We are expecting for the overall holiday shopping season that retail sales will grow somewhere between 8.5 and 10.5%, which is certainly much higher growth than the level of inflation.”

And it’s not just growth, but record spending. It’s up to nearly $860 billion in the last two months of 2021.

Two million more people are expected to shop from Thanksgiving Day through Cyber Monday this year compared to last.

“Those are the trends we’re certainly seeing as it relates to how the shopping patterns happen at Lowe’s right now,” Boltz said.

But the surge in early holiday shopping is overwhelming some smaller retailers.

Brandy Deieso, owner of the Little Apple in Philadelphia, said supply chain issues delayed key holiday merchandise.

“Having people come early was making me a little nervous,” she said. “Two of my large orders I ended up having to cancel.”

And while she said she’s had to raise prices to offset higher freight costs, she said shoppers are still buying and is expecting a larger than normal crowd on Black Friday.

Deieso said, “People are still coming to shop small on Black Friday as well, which has been a new phenomenon that just started in the last couple of years.”

But there may be another phenomenon for early shopping, and lots of it, this holiday season. It’s something that can’t be defined by a number or economic indicator.

“The holidays of course bring people together and that’s the spirit that you know people are trying to capture,” Deieso said. “And by coming out and shopping and buying gifts and things that are special and thinking of their loved ones. I think people have just been craving that for so long. Now they finally feel comfortable enough to do it again.”

Analysts believe the average American will spend about $1,000 on holiday shopping this year. That’s down from 2019 before the pandemic started, but about the same as last year.

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