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Are Apparel Sales in for a Happy Holiday? Here’s What Mastercard and Deloitte Expect

The most wonderful time of the year is expected to be bountiful for retailers, particularly as more consumers make their in-person return to shopping in stores.

According to Mastercard SpendingPulse, which measures overall retail sales across all payment types including cash and check, U.S. retail sales are anticipated to grow 7.4 percent for the 2021 holiday season, excluding automotive and gas. This figure, which accounts for sales from Nov. 1-Dec. 24, would trounce the 3 percent growth seen in 2020. When including gas, the number climbed to 8.1 percent, Mastercard said Monday. Meanwhile, Deloitte’s retail forecast calls for growth in the same range, estimating a holiday sales uptick between 7 percent and 9 percent, or $1.28 to $1.3 trillion from November to January, it said Tuesday.

“As vaccination rates rise and consumers are more comfortable being outside of the home, we are likely to see increased spending on services, including restaurants and travel, while spending on goods will continue to hold steady. A steady decline in the savings rate to pre-pandemic levels will support consumer spending and keep retail sales elevated this season,” Daniel Bachman, Deloitte’s U.S. economic forecaster, said. “Further, e-commerce sales will continue to grow as consumers demonstrate an ongoing and steady movement toward buying online across all categories.”

According to Mastercard, consumers are expected to spend 7.6 percent more online than they did last year, so while the growth isn’t as massive as the 57.3 percent experienced in 2020, the e-commerce volume is still on the rise. In-store sales are expected to grow at a higher pace, at 6.6 percent compared to 2020.

When accounting for the early portion of the holiday season, which Mastercard anticipates will again start in October this year, retail sales for what it calls the “75 Days of Christmas” starting Oct. 11 are anticipated to grow 6.8 percent excluding automotive and gas, and e-commerce sales to grow by 7.5 percent compared to the same time period last year. On a two-year basis, e-commerce sales 59.2 percent.

Apparel is anticipated to benefit throughout the gift-giving season, with Mastercard projecting 45.9 percent growth during the traditional holiday starting Nov. 1. Department stores are seen generating 14.8 percent more year-over-year sales in the period.

“This holiday season will be defined by early shopping, bigger price tags and digital experiences. Over the past two years, retailers have learned a lot about what shoppers want and need, bringing us into an exciting new age of retail resilience,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Incorporated, in a statement. “Retailers have been preparing for this moment and will find innovative ways to deliver on what’s bound to be the biggest holiday shopping season yet.”

Mastercard unveiled its results for August in the projections, indicating that U.S. retail sales excluding automotive and gasoline increased 8.1 percent year-over-year, and 7.7 percent compared to August 2019. Online sales in August grew 8.1 percent and 82 percent respectively, compared to the same periods.

The apparel and department store industries showed promise throughout the end of the summer, helping aid the holiday season projections. Apparel saw 75.2 percent growth in August, while department stores saw 28.7 percent growth. Electronics saw less of a jump, but still significant at 12.4 percent.

Fueled in part by built-up savings and government stimulus, consumers have the desire and the means to spend, the report said. Mastercard said that over the past six months, luxury retail and jewelry sectors have been experiencing “some of the strongest” year over year and two-year growth; that is anticipated to continue through the holidays.

“Across channels, retailers should expect a strong holiday season as consumer spending levels are projected to remain high,” Rod Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader, added “While consumer concerns about health and safety have eased since the last holiday season, pandemic-influenced shopping behaviors continue to gain traction. Retailers who remain resilient to shifting consumer behaviors and offer convenient options for online and in-store shopping, as well as order fulfillment, will be poised for growth this holiday season, and into the new year.”

Amazon, Dick’s and UPS ramp up holiday hiring

In some of the latest examples of how the industry is prepping the holiday rush, Amazon is planning to hire an additional 125,000 employees throughout the U.S., on top of the 40,000 corporate and technology jobs announced earlier this month. The total exceeds the 100,000 employees brought in for the 2020 holiday.

The roles, which will focus on fulfillment and transportation, offer an average starting wage of more than $18 per hour—and up to $22.50 per hour in some locations. Hiring for the new roles is already underway and signing bonuses of up to $3,000 are available in select locations.

With no shortage of jobs available but rather a lack of people to fill them, Amazon is hoping the signing bonuses and wage increases can incentivize prospective employees as the tech titan aggressively expands its fulfillment network. Amazon has opened over 250 new fulfillment centers, sortation centers, regional air hubs and delivery stations in the U.S. in 2021, and says it and will open more than 100 buildings in September alone.

“We are proud to offer opportunities for people from a range of backgrounds, from furloughed workers to former military personnel,” Dave Clark, CEO of Worldwide Consumer at Amazon, said in a statement. “We take our responsibility as an employer seriously and want our employees to succeed and thrive. That’s why we offer an average starting wage of over $18 per hour, provide a great range of comprehensive benefits—including healthcare coverage, parental leave, career training, and ways to save for the future—and have a team of thousands working to build a safe and inclusive work environment. Whether you’re looking for a short-term job to make money for the holidays or a long-term career, you’re welcome here, and we look forward to having you on our team.”

The e-commerce giant also said its more than 2,500 delivery service partners plan to hire more than 50,000 delivery drivers by the end of the year.

Alongside the holiday hiring, Amazon is hosting a Career Day on Wednesday. The free virtual event will offer 20,000 individual career-coaching sessions with Amazon recruiters to help participants land their next job, and give current employees sessions to attend if they seek transition to higher-paying roles within the company or elsewhere. Attendees will have access to personalized career coaching, insights, advice and learning opportunities from Amazon CEO Andy Jassy and other industry experts, as well as tactical training through coding workshops and breakout sessions.

Additionally, Dick’s Sporting Goods announced that it will hire up to 10,000 seasonal store associates for the 2021 holiday season, which would be 1,000 more than it did last year. Dick’s is launching its holiday recruiting efforts on Sept. 15, for what it calls its fourth-annual “National Signing Day.”

To enhance customers’ shopping experience and help to ensure customer and employee safety, the retailer will designate associates to fulfill curbside contactless pickup and ship-from-store orders as well as thoroughly staff areas inside and outside the store throughout the holiday season. Dick’s also will look to hire up to 250 new associates to fulfill seasonal staffing needs in all five of its nationwide distribution centers.

“Our in-store associates are key to providing the exceptional customer service and expert guidance our customers expect,” said Julie Lodge-Jarrett, senior vice president and chief people officer, Dick’s Sporting Goods in a statement. “In addition to our wide merchandise assortment and e-commerce selections, we’re looking forward to offering our customers an elevated holiday shopping experience while also providing a great place to work for our associates.”

And after Walmart already firmed up plans to hire 20,000 workers across its supply chain at more than 250 Walmart and Sam’s Club distribution centers, fulfillment centers and transportation offices, UPS is following through with plans to recruit 100,000 seasonal employees. The total doubles the 50,000 the delivery company hired ahead of the season last year.

With the hires, UPS wants to support the anticipated annual increase in package volume across full- and part-time seasonal positions, primarily package handlers, drivers, driver helpers and personal vehicle drivers.

“We’re preparing for another safe, record peak holiday season. With Covid-19 continuing to impact Americans, our services are more important than ever,” said Nando Cesarone, president, U.S. operations at UPS in a statement. “We plan to hire more than 100,000 people for seasonal jobs, many of whom will have an offer in hand within 30 minutes of applying. Our seasonal hires will help us provide the most reliable service in the industry, just like we did last year.”

Over the last three years, about one-third of people hired by UPS for seasonal package handler jobs were later hired in a permanent position when the holidays were over. Approximately 138,000 current UPS employees, nearly one-third of the company’s U.S. workforce, started in seasonal positions.

UPS is attempting to sweeten the deal for its seasonal holiday employees. With the Earn and Learn program, eligible seasonal employees who are students can earn up to $1,300 towards college expenses, in addition to their hourly pay, for three months of continuous employment.

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