(CBS4) — This year, according to the National Retail Federation, retailers are making a big comeback — and setting records — thanks to consumer spending habits. And it may come as a shock, but experts say e-commerce is only a small part of it.
“We love stores, and the thing is as soon as the stores opened back up, we went back to them again brick and mortar sales are up 64% this year from last year, which is really good news. These are people physically going to the stores to take immediate possession of the goods,” said Darrin Duber-Smith, Senior Lecturer with Metropolitan State University.
Duber-Smith says online spending is only about 15-20% of sales this year — pandemic closures and lockdowns last year likely driving more people to shop in person.
“We’re primates, we have all five of our senses and so the internet is only engaging a couple of senses,” he said.
With stay-at-home orders at the beginning of the pandemic, it also meant Americans weren’t spending money on top of receiving federal financial assistance.
“The government has been pretty good at printing money for everyone… everyone has a lot of disposable income right now, our savings rate is through the roof and spending is supposed to increase by 10 percent this year according to the National Retail Federation,” said Duber-Smith.
But Duber-Smith says he is predicting a spending hangover for next year. At the end of last month, the Commerce Department reported that U.S. economy grew at a 2% rate in the third quarter, its slowest gain of the pandemic-era recovery, with supply chain issues a major contributor. Duber-Smith points to signs like this, among others as cause for future economic concerns.
“I think next year we’re in for some comeuppance. I think possibly a recession by the end of next year, the inflation is out of control, it’s the worst it’s been in 31 years, interest rates are still zero,” he said. “I’m a little worried that next year, we’ve got these disease variants, the pandemic doesn’t seem to be gone, I’m a little worried that this year isn’t going to be as merry as next year.”
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