Christmas tree gross sales inform a holly, humorous financial story
John Williams (left) and his father Terry (right), both from Salem, work together to carry a large Christmas tree from the field at Tucker Tree Farm in Salem, Oregon on November 29, 2020.
Alisha Jucevic | Reuters
Tree traders have a brisk season this year as Americans staying closer to home due to the coronavirus pandemic add even more to the vacation spirit.
Traffic and sales in tree stores that year were anything but ho-ho-hum. Traders report a big season that started early and continued to accelerate through early December.
If consumers plan to be Grinches this year, you certainly can’t tell by tree activity.
“People have time at home this year. They travel less of course, so they are home and really want something that gets their spirits up because of the Covid stress everyone is under,” said Doug Hundley, seasonal spokesperson for the National Christmas Tree Association. “The Christmas cheer is a great force this time of year, and people know that the more they put into it, the more they benefit.”
According to a survey of retailers conducted by Evercore ISI, tree sales rose 29% in 2020. There is also evidence that people are getting bigger trees and buying more home accessories.
The trend assumes growing pessimism about the picture of the economy over the next three to six months. Wall Street forecasters expect little to no growth until a Covid vaccine goes online and Americans can get back to their normal lives.
Christmas trees help paint a slightly more upbeat narrative.
“People stay home and get a really big tree,” Evercore analyst Ed Hyman said in a note. “The theory is that when times are good, people buy extra wreaths, garlands, and a larger tree, and when times are tough, people avoid the additional purchase.”
According to Statista, Americans will buy between 25 and 30 million real Christmas trees each year, plus another 10 to 20 million artificial trees. However, the $ 2 billion industry can tell an economic story by being ready to attract flamboyant people.
“Simply unbelievable demand”
The pandemic has added a new fold.
With the number of new cases rising and the likelihood that this year’s Christmas celebrations will be more intimate and closer to home, this could benefit an industry that does justice to this very environment.
This year people have come out earlier to buy the key item for their Christmas decorations and seem to be spending more on the decor.
“We’re seeing a lot of excitement, maybe a small increase in the size of the trees people choose,” said Chris Gregory, owner of Boston Christmas Trees in Allston, Massachusetts. “What we’ve seen is an increase in early sales, and many families have bought many other things to decorate their homes.”
Gregory said buyers were “very, very excited”.
That was the case across the industry.
Balsam Hill, a major tree merchant based in Redwood City, California, had a Christmas sale in July that saw high demand – and has not slowed since then.
“What we’ve seen this year since the pandemic is an incredible demand for anything to make your home better,” said Mac Harman, founder and CEO of Balsam Hill, who called the July sale “insane, just off the charts “designated.
“I’ve never had so many texts, messages, and posts from friends about how they put their tree up early,” he added. “People get big and they leave early.”
As an economic indicator, Christmas trees can be a little tricky.
Economists refer to “inferior goods” or those that actually see higher demand as incomes fall. Christmas tree purchases remained stable during the last recession from 2007 to 2009, when 28.2 million trees were sold in each of the last two years of the Great Recession.
However, Harman said consumers were buying smaller trees and fewer decorations back then.
This time around, he’s encouraged by people who don’t turn to cheaper, smaller products and buy tons of extras. He found that fewer large trees were bought for offices, which makes sense as working from home continues to be widespread.
“Consumer confidence is high because we don’t see anyone trading down in price at all,” he said. “That means people are optimistic and ready to invest to make their homes better.”