Acquiring minds want to go… to more restaurants, shops and vacation spots as 2021 heats up.
You always remember your first time — after a pandemic. That long-awaited return to your favorite restaurant, reuniting with old friends down at the coffee shop or lift-off as you jet away from the routine turned rut for a well-deserved and carefree change of scenery for the first time in nearly a year and a half. That post-pandemic pent-up eagerness and energy on an individual basis is adding up to a whole lot of industry demand for retail and restaurants. Like the summer sun, consumer confidence also rises.
In February, before there was a clear picture of vaccine distribution, COVID-19 infection rates and additional fiscal stimulus, the National Retail Federation projected year-over-year retail sales growth of between 6.5 percent and 8.2 percent for a total between $4.33 trillion and $4.4 trillion. Well, at the beginning of July, the world's largest retail trade association revised its 2021 retail sales expansion numbers up to 10.5 and 13.5 percent over 2020 to a range between $4.44 trillion and $4.56 trillion.
Furthermore, the NRF now expects gross domestic product for the full year to approach 7 percent, after starting out at an annual rate of 6.4 percent in the first quarter of the year. That would be the fastest growth rate since 7.2 percent in 1984 and far above the 4.4 to 5 percent forecast in February. Personal consumption expenditures, which cover both goods and services, are now expected to grow 7.5 percent year-over-year rather than 4.5 percent, according to the NRF’s early July release.
The $388.6 billion in retail sales posted in May was the second-highest level on record, behind only the $414.7 billion achieved during the 2020 holiday season, the association’s research showed.
Why all the fiscal fireworks and how will that affect the third quarter outlook? We know that summer is the season of travel, weddings, outdoor sporting and other events in normal years, but this summer is unlike any other. Americans have built up an estimated $1.7 trillion in excess savings during the pandemic, according to research from global payments company Blackhawk Network, and, like a sailor finally reaching port, they are ready for a break, to break out, to break the mold. Add to that consumer predisposition and power the fact that thousands will want to make up for missed milestones, celebrations and traditions. That’s very good news for retailers, restaurant owners and the travel industry, all of which took their lumps during 2020.
With the elevated consumer confidence and surging sales numbers, retailers might be tempted to view the market as an easy street. Challenges remain though, including labor supply. It’s always a good idea to hone a balanced retail approach — has your bricks & mortar game become a little rusty? — as well as reassess your brand messaging and ensure that your marketing strategies are innovative, creative, highly engaging, and high impact — as well as purpose-driven.
