Now that North Alabama prepares to bid 2021 either adieu or good riddance, it’s time to look ahead to what 2022 has in store for the area’s retail market. The past year has been eventful, to say the least, leaving consumers and retailers to deal with rising prices along with product and labor shortages.

A recent University of Michigan study found national consumer sentiment to be at a ten-year low. Although it found that early December brought a small overall gain in consumer confidence (+4.5%), inflation remained a significant cause of concern.

According to the Alabama Retail Association, the state saw a significant boost in retail sales over the last quarter, with taxed sales in the state as of October 2021 exceeding by almost 17.8% sales made during the same ten months in 2020.

Fears of shortages have also led Alabamians to begin their holiday shopping early to ensure that they could get the gifts they wanted and have them arrive on time. As a result, October 2021 sales were up by almost 14% over the same period in 2020.

Thanks to higher vaccination rates and masking, Alabama consumers began shopping in-store more in 2021 than in 2020 and are expected to spend more on travel and entertainment this holiday season than last year.

Despite this holiday boost, as the pandemic enters its third (and hopefully last) year, some national experts forecast that the champagne toasts will be followed by a post-holiday hangover.

Fortunately for local retailers and consumers, the Huntsville-Madison County area continues proving itself to be the exception to the rule.

Despite somewhat gloomy national reports, the Huntsville metro area has a considerably sunnier outlook with regard to retail and industry than the nation in general according to a recent update from Ken Smith, the Huntsville-Madison County Chamber of Commerce’s Director of Research and Information Services.

Smith reported that overall, metro area employment has recovered and surpassed pre-Covid levels for most industry sectors. In addition, Moody’s has projected strong growth for the

Huntsville metro area, which is expected to outpace the growth of the U.S. economy over the next five years.

According to Smith, employment in the Huntsville metro area’s retail sector has increased by 1,500 between March 2020 and October 2021, a rate of 6%. The national average is only 1%.

Despite some economic uncertainty in the wake of the pandemic, Dr. Liwu Hsu of the UAH College of Business agrees that the Huntsville retail market is well-positioned going into the new year.

“From the demand side, consumers are in a favorable position as income is rising and household balance sheets are strong. In addition, both fiscal and monetary policy intervention has created an overabundance of purchasing power,” Hsu said. “From the supply side, retailers have been making significant investments and adjustments in their supply chains to ensure they have products on their shelves to meet the exceptional consumer demand.”

When asked whether he agreed with Smith’s assessment of the Huntsville area market, Hsu confirmed that Huntsville is one of the best-performing cities in the nation, with a skilled workforce and innovative/entrepreneurial culture supporting its regional high value-added industries.

Hsu also noted the growing regional labor market, noting that according to the latest data from the U.S. Bureau of Labor Statistics, the unemployment rate in Huntsville is down to 2%, with 229,600 people in the workforce.

Hsu attributed three key elements to the local retail sector’s continued growth: its increasing population, the highest median income in the state, and its ready access to technology.

“Online channels and social media have changed shopping behavior and retail business models,” Hsu explained. “91% of Huntsville households have computers, and 85% of Huntsville households have high-speed internet. The technological impact and media explosion are essential when retailers move from multi-channel to omni-channel retailing.”

Barring unforeseen developments, Hsu expressed optimism about the Huntsville-Madison area’s retail market and the local economy in general going forward. “The combination of vaccine distribution, fiscal stimulus, and new job opportunities have put more residents back to work.”

“As a result,” Hsu added, “households around this area are healthier, and consumers demonstrate their ability and willingness to spend.” Although other regions in the nation may find themselves experiencing a post-holiday fiscal hangover to some degree, Huntsville-area retailers will very likely continue their celebration well into the new year.