The cost of Christmas: 2021 holiday sales expected to shatter records

Yahoo Finance's Brian Sozzi reports expectations for holiday shopping as consumer spending on retail items, food supplies, and Christmas trees soars.

Video Transcript

JULIE HYMAN: Well, the holidays are all about family and friends, reflection, and gifts, and American spending. They spend a lot on their loved ones and even themselves.

BRIAN SOZZI: Ah, the holidays. It's that time of year when gatherings take place, and for the 90% of US adults who plan to celebrate the festivities, including Christmas, Hanukkah, and Kwanzaa, exchanging gifts occurs. That means a whole lot of money for the retail sector.

Despite a global pandemic, the world's largest trade group is predicting US holiday sales the last two months of the year to yet again crush records by growing between 8 and 1/2% and 10 and 1/2% from the previous year to about $850 billion. That is almost equal to three times the net worth of Elon Musk.

So how exactly do people plan on spending their hard-earned cash this year? Lots of money will be spent on gifts, food, candy, decorations, and cards. As for other plans, grand total, $997.

Even though overall plans for holiday spending remains slightly below their prepandemic high of more than $8,000 in 2019, consumers will still be buying a whole lot of gifts, food, and decor this year, and retailers have their hands full. Businesses are expected to hire more than a half a million seasonal workers versus 486,000 hires in 2020 to accommodate high demand amid supply-chain constraints. These bottlenecks are hitting hard across all sectors, including food and beverage, furniture and appliances, as well as clothing and apparel.

And Christmas trees-- no Christmas tree? You've probably seen the headlines about there being a shortage, which has led to a price surge in many areas of the country for both artificial and real trees. The latter are a result of growers being hit hard by floods, fires, smoke, droughts, and extreme weather conditions. Industry officials expect Americans to pay up to 30% more for both types of trees this year.

So ho, ho, ho, Merry Christmas from your friends at Yahoo Finance.