Retailers closed a brutal 2020 with a glimmer of hope as the holiday shopping season turned out better than expected.

Sales in November and December jumped 8.3 per cent from a year prior, the National Retail Federation said Friday. That’s far above the group’s prior forecast for a gain of 3.6 per cent to 5.2 per cent.

The results demonstrate “incredible resilience” by retailers and consumers amid the unprecedented challenges of the pandemic, NRF Chief Executive Officer Matthew Shay said in a statement. Shoppers kept spending even in the face of “rising transmission of the virus, state restrictions on retailers and heightened political and economic uncertainty.”

The results stand in contrast to a broader retail sales decline reported Friday by the U.S. Commerce Department. Those figures include restaurants, which faced a similarly tough 2020 without the holiday bump seen by other retailers that were able to leverage e-commerce.

After the pandemic led to store closures and reduced foot traffic for much of 2020, retailers tried to appeal to consumers with options like curbside pickup and hubs within their stores offering services like returns and gift cards. Retailers also pushed shoppers to use digital channels and purchase gifts earlier than usual, even in October when Halloween decorations and costumes were still being sold.

Digital Gains

The efforts largely worked, turning the holiday season into a very digital one. Customer Growth Partners on Friday said e-commerce “continued to expand at a near 30 per cent pace, far outstripping other categories and comprising almost 70 per cent of the aggregate increase in holiday sales.” That led to the biggest year-over-year holiday increase this century, the group said.

The gains were far from uniform, though. Companies like Target Corp. fared better than department stores and other mall-based retailers. Abercrombie & Fitch Co., meanwhile, expects fourth-quarter sales to fall, but in a sign of the better-than-expected season, the chain actually raised its revenue forecast on Monday.

“We entered ready to compete,” Chief Executive Officer Fran Horowitz said during an investor conference Tuesday about the holiday season. “Ultimately, we not only achieved, but exceeded, our plan despite some continued and unexpected challenges.”