American consumers have proven that October is the unofficial start of the holiday season, as estimated U.S. retail and food service sales rose 1.7% last month.
In total, October sales came in at roughly $638 billion last month—up 16.3% over October 2020, according to U.S. Census Bureau data released Tuesday. Grocery store spending has increased by 1.1% and gasoline sales rose 3.9% from September.
“In general, supply chain disruptions have not had as much of a negative impact on retail sales as we would have imagined before,” says Anindya Ghose, a professor at New York University’s Stern School of Business. “Travel has picked up, so any retail associated with travel will also be going up.”
Excluding gas stations, e-commerce and electronics stores saw the most growth since September, at 4% and 3.8%, respectively. Food and drink establishments saw neither an increase or decrease in sales from September, according to the report. Clothing and apparel sales dropped 0.7% and personal care store sales fell 0.6% in October.
Sarah Wyeth, an analyst at S&P Global, predicted that retailers are likely to raise prices because of supply chain fears. However, she says many consumers have increased savings and paid down debts during the pandemic, so they’ll be able to weather these increases.
“The consumer is financially in a good position, so they are relatively insensitive to price increases that retailers add because of inflation,” Wyeth says.”Retailers raise prices because they know they know the consumers know that the supply chain could put a real damper on the holidays.”
In addition to fairly consistent retail sales growth, this year also marked a large growth in the resale economy. Americans are projected to spend more than $160 billion on secondhand items this year, up from $140 billion last year, according to a report by online retail marketplace Mercari.
Some 62% of Americans surveyed by Mercari indicated they are worried about product availability this holiday season, driving them from retail to resale, according to Jason Langerling, Mercari’s U.S. CEO. He says he expects that resale sales will increase 154% to $354 billion by 2030.
“Over the years, recycling and buying organic was more of a niche behavior,” Langerling said in the report. “It has now become a way of life.”