Alabamians spent a record-shattering $17 billion in November and December 2021, capping off a year like no other.
Sales in the traditional holiday shopping months grew 15.4 percent compared to the same months in 2020. Sales tax collections for all of 2021 grew more than 17 percent over 2020, based on state records.
Taxed sales in Alabama for the final two months of the year reached $17,063,834,041.31, according to the Alabama Revenue Department. Nationally, holiday retail sales grew 14.1%*, according to the National Retail Federation.
The $17 billion in Alabama holiday spending is based on sales tax collections on general merchandise, restaurant and other food service, automobiles, machinery and vending, plus collections made through the state’s Simplified Seller Use Tax (SSUT). Alabama Retail defines holiday spending as all taxed sales during the months of November and December.
As Alabama Retail predicted, holiday sales grew by double digits for the second year in a row. Taxed holiday sales in 2020 grew 11.6 percent over 2019. Other than an almost 10 percent growth in 2018, the annual holiday sales year over previous year growth generally has ranged from 3 percent to 5 percent as it did in the five years prior to 2018.
“Alabama retailers experienced unprecedented growth during the holiday shopping season, which put the icing on the cake of a record year,” said Alabama Retail Association President Rick Brown. “Alabama consumers spent their money on retail goods, despite the ongoing pandemic and inflationary prices. Federal benefits, higher wages and money stored away in savings accounts made it possible for consumers to keep the holidays bright for their family and friends.”
The growth rate for 2022 should moderate as federal benefits wane, consumers spend more on services and the Federal Reserve raises interest rates, but for right now, we remain in a growth period, federal retail economists say.
State retailers we spoke with said they aren’t sure what to expect for the rest of 2022, but so far this year, sales have continued to grow as they head into Valentine’s and Super Bowl weekend.
Retailers located in Alabama continue to sell instore, while doing an increasing amount of business online. For holiday 2021, remote online sellers accounted for 11.25 percent of total sales. For all of 2021, those paying the Simplified Sellers Use Tax remitted about 16 percent of all of the sales taxes collected. In 2021 compared to 2020, Alabama saw a 27.53 percent growth in the amount of sales tax collections via those remote online, phone, catalogue and other non-store sales.
“Alabama retailers are thankful for the customers who supported them with zeal throughout 2021 and look forward to continuing to serve those customers as 2022 unfolds,” said Brown.
*NRF excludes automobiles, gasoline and restaurant sales from its holiday sales numbers