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

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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.

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