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February 24, 2021
surge of expected store closings early this year hasn’t materialized after strong holiday sales prompted retailers to hold on to their leases in hopes of a shopping rebound.
“It wasn’t the wave everyone thought it would be,” said Ryan Mulcunry, a managing director at B. Riley Financial Inc. who advises retailers.
Last year, retailers announced plans to shutter a record 12,200 stores, according to CoStar Group. But some are now reconsidering after larger holiday revenues and ready support from lenders gave them more breathing room, Mulcunry said. Holiday sales jumped 8.3% in November and December compared with a year earlier, according to the National Retail Federation, easily beating an expected gain of 3.6% to 5.2%.
Online holiday sales still came out as the winner, reaching $201.32 billion, up an impressive 45.2% from $138.65 billion in 2019, Digital Commerce 360 estimates. Many consumers greatly shifted their behavior, including more online shopping, due to the coronavirus pandemic.
COVID-19-related shifts in buying behavior translated into an additional $41.54 billion in digital revenue for November-December, according to Digital Commerce 360. If online holiday sales had accelerated at a more typical seasonal growth rate—a median 15.2% over the prior five years—revenue wouldn’t have reached 2020-estimated levels until 2022. A normal, pandemic-free holiday in 2020 likely would have resulted in consumers spending about $159.78 billion on the web.
