Can you hear those sleigh bells ringing? It’s that time of year again: Christmas is coming, and the holiday shopping season is nearing another peak. With plenty of question marks still hovering around the Omicron variant and how it will affect the upcoming holidays, for many of us, it’s still uncertain if we’ll be able to travel for Christmas. Either way, the tradition of gift giving is stronger than any virus, and it’s safe to say that presents will be given, no matter where the celebrations take place.
Retail: The aftermath of November, e-commerce month
In recent years, November was established as an international shopping month. It started with Black Friday, which is considered the beginning of the holiday shopping season. Consequently, other days dedicated to shopping have emerged, such as Cyber Monday, the online follow-up to Black Friday.
Last year’s Cyber Monday was the biggest one ever. Sales reached $10.8 billion, 15% more than the previous year1. In 2021, Cyber Monday’s sales dropped 1.4% to $10.7 billion2 — the first year sales figures did not go up. There are several reasons for this, including lack of confidence in online shopping in the face of a supply chain crisis, as well as the fact that major retailers blasted holiday deals as early as October. According to National Retail Federation CEO Matt Shay, early holiday shopping is shaking up these staple shopping days. Last year, people were shopping early to avoid crowds; this year, they are doing it because of the supply chain crisis3.
Travel: Are we looking at a stay-at-home Christmas?
The simple answer is that we don’t know yet. The US government added new entry requirements earlier in December, and the Centers for Disease Control and Prevention (CDC) issued travel warnings to some popular tourist destinations for Americans, such as France and Portugal. They will be joining the “Level 4: Very High” list, which also includes Germany and the UK.
According to AAA, more than 109 million Americans are likely to travel over the holidays, nearing 2019’s pre-pandemic record of 119 million travelers4. On Thanksgiving, Americans set a pandemic-era record, as the TSA reported it screened 2,451,300 people the Sunday after Thanksgiving5.
Omicron concerns took their toll on the travel sector, but earlier in December, the White House’s chief medical advisor Dr. Anthony Fauci said that although we can’t be certain, it appears as though the new variant does not have “a great degree of severity to it.” Following the announcement, shares of US airlines such as Delta Air Lines, United Airlines, American Airlines, and Southwest Airlines gained significant ground.
Food: The rising costs of food amid soaring inflation
Meat dishes are traditionally set at the center of the table during Holiday dinners. This November, beef prices went up 20.9% from last year6, the US Bureau of Labor Statistics reported. The food and grocery retail market in North America garnered revenues of $1,795.9 billion in 2020, a compound annual growth rate (CAGR) of 5.9% between 2016 and 20207.
According to the consumer price index, food prices rose 6.1% over the year8. Groceries are getting more expensive, due to the supply chain crisis and the rising costs of labor, and Americans are having to readjust to this new reality.
A holly, jolly, pricey holiday
With COVID restrictions being renewed all over the world, there is still a lot of uncertainty around the upcoming holidays. But with inflation rising and prices soaring, we can probably expect them to be expensive.
Sources:
- https://www.cnbc.com/2020/12/01/holiday-2020-shoppers-spend-10point8-billion-on-cyber-monday.html
- https://www.cnbc.com/2021/11/30/cyber-monday-online-sales-drop-1point4percent-from-last-year-to-10point7-billion-falling-for-the-first-time-ever.html
- https://www.cnbc.com/2021/12/01/holiday-shopping-2021-weeks-ahead-will-test-retailers-lofty-expectations.html
- https://edition.cnn.com/travel/article/winter-holiday-travel-2021-prediction-busy/index.html
- http://edition.cnn.com/travel/article/pandemic-air-travel-record-thanksgiving/index.html
- https://www.bloomberg.com/news/articles/2021-12-10/price-shock-at-the-meat-counter-worsens-u-s-inflation-jitters
- https://www.marketresearch.com/MarketLine-v3883/Food-Grocery-Retail-North-America-30131589/
- https://www.cnbc.com/2021/12/10/consumer-price-index-november-2021.html