TePORT: Retail Giants Brace for Festive Sales Surge
In what promises to be an unprecedented holiday shopping season, retail giants Amazon.com and Foot Locker are reveling in the afterglow of robust Black Friday and Cyber Monday sales that have set an exhilarating tone for the year-end retail frenzy. The retail landscape witnessed a surge in activity as budget-conscious shoppers flocked to take advantage of enticing discounts on these pivotal shopping days.
Contrary to initial cautionary tones from retailers leading up to the holiday season, early estimates on holiday shopping have sent positive ripples through the investor community. Online sales in the United States, spanning the five-day period from Thanksgiving through Cyber Monday, reached an unprecedented $38 billion, according to data from Adobe Analytics. Meanwhile, the National Retail Federation reported that over 200 million consumers engaged in both in-store and online shopping during the holiday weekend, surpassing earlier projections.
Jimmy Lee, CEO of Wealth Consulting Group, expressed optimism, stating, “While there are parts of the consumer that definitely are much slower and weaker, from a spending perspective, there’s still a lot of money sitting on the sidelines… (The holiday season) actually could be a little bit better than what most people think.” Lee’s sentiments were echoed by the upward revisions of annual sales expectations by Ulta Beauty and Foot Locker earlier this week, with the latter attributing its strong holiday start to substantial discounts.
Recreational and sporting goods retailers experienced a staggering 322.9% increase in Black Friday store visits compared to the year-to-date daily average for 2023, according to foot traffic data from Placer.ai. This surge marked a notable 305.2% increase from the previous year.
Foot Locker CEO Mary Dillon, in a conference call on Wednesday, highlighted the company’s strategy in catering to a value-conscious consumer, saying, “We know we’re buying for wallet share with a value-conscious consumer this holiday season. Quarter-to-date, we’ve been pleased with the trends as consumers respond to our full-price holiday assortments in addition to our compelling deals.”
Amazon, not to be outdone, reported its biggest-ever extended Black Friday and Cyber Monday holiday shopping event. Spanning from November 17 to November 27, the event surpassed previous years’ performances culminating on Cyber Monday.
According to a BofA Global Research report, card spending during the week ending November 25 was 1.7% higher than the same period last year, with correspondingly larger increases in spending on holiday items this year.
As deep discounts continue to dominate the retail landscape this holiday season, some executives anticipate even more significant discounts in December. Kohl’s CEO Tom Kingsbury emphasized the company’s aggressive holiday promotions, setting the stage for an intense competition among retailers.
Major players, including Walmart, Abercrombie & Fitch, and American Eagle Outfitters, have raised their annual forecasts, positioning themselves for a robust holiday quarter, Reuters reported. Since August 1, the consumer discretionary sector has recorded the highest percentage increase in earnings, according to LSEG IBES data.
However, not all retailers share the same bullish outlook. Kohl’s, Best Buy, and Lowe’s have tempered their sales forecasts for the year, indicating a degree of caution. Jason Benowitz, Senior Portfolio Manager at CI Roosevelt, offered insight into the consumer landscape, stating, “The U.S. consumer is bifurcated. Lower income households are pulling back on discretionary purchases… But outside of the lowest tier, we believe household consumption remains resilient.”
As the stage is set for an unprecedented holiday shopping season, the dichotomy between caution and optimism in the retail industry offers a glimpse into the dynamic conclusion awaiting us in the year-end consumer landscape.
TePORT: Retail Giants Brace for Festive Sales Surge
