After a dip in retail sales following the Nov. 8th elections, customers are getting back to business. Retailers are counting on tight inventories and extensive promotions early in the season to reduce the need to clear excess with margin-destructive markdowns late in the season.
This holiday season, the S&P Global Ratings team estimates that retail sales for general merchandise, apparel and accessories, furniture, and other retail categories will increase between 2.1–2.5% year-over-year—the slight increase will still be well below the long-term average of 3.7% growth. Discounters continue to fare better than specialty apparel, with department stores somewhere in between.
An estimated 137.4 million Americans have turned out to shop this weekend. According to the National Retail Federation (NRF), 59% of Americans were expected shop online or in-store this Thanksgiving weekend on Thanksgiving (21% of those who planned to shop), Black Friday (74%), Small Business Saturday (47%) and Sunday (24%).
Plus, 36% of Americans will turn out on Cyber Monday; the figure was not included in the overall holiday shopping calculations. According to CareerBuilder’s annual Cyber Monday survey, 53% of workers say they’ll spend at least some of their work time internet shopping, up 3% from last year. Of this group, 43% spend an hour or more doing so, compared to 42% from last year.
Most of the crowds will be young, according to NRF; 77% of 18- to 24-year-olds and 76% of 25- to 34-year-olds plan to shop over the weekend. And the youngest cohort, Generation Z (10- to 17-year-olds) is quickly becoming the most influential, according to HRC Retail Advisory. They’re more likely to shop in malls; HRC’s data shows that 72% of Gen Z respondents and millennial parents shop in malls, compared to 60% of all consumers. Their habits are a bit different, however; they shop with a mission, visiting 4–5 stores for an average of 90 minutes.
The NRF estimates that over half of consumers (55.7%) are starting their holiday shopping on Black Friday, one of the busiest shopping day of the year. After apparel and accessories (61% plan to buy); the most popular choices are gift cards (56%); entertainment like books, CDs, DVDs, videos or video games (44%); toys (42%); food or candy (31%); and electronics (30%).
The most popular types of gift cards, according to NRF, include those from restaurants (35% of buyers), department stores (33%), Visa/MasterCard/American Express (22%), coffee shops (21%), and entertainment (17%). And according to HRN, 69% of Gen Z would rather receive a gift card than an actual gift compared to 62% of all shoppers.