Large numbers of Americans are expected to return to stores and malls over Thanksgiving and the days ahead, despite higher prices, product scarcity and online spending. Line spikes early before the official start of the holiday season.
US consumers have spent $72.2 billion online since early November, Adobe Analytics reported Wednesday. This is nearly 20% higher than the same period in 2020, and more than a third of the total $207 billion in online spending that Adobe projects in November and December.
Sharp income divergence announcements from leading chains have established the interval between Thanksgiving on Thursday and Cyber Monday, the traditional peak five days of the US retail calendar, as a decisive test of health of the industry.
Following strong results from “big box” retailers like Walmart and Home Depot and the disappointing display of electronics and clothing chains including Best buy and Gap, investors are watching for clues about the strength of consumer confidence and the resilience of supply chains struggling to support demand.
A survey by the National Retail Federation found that a slightly larger number of Americans plan to shop this Thanksgiving weekend than during the same period last year. For Black Friday shoppers, the day after Thanksgiving when Retailers Having served this group of customers before, 64% plan to go to stores rather than buy online.
That’s a jump from 51% a year ago, when a Covid-19 vaccine was unavailable and health concerns kept most shoppers at home. But the number of people who went to stores in 2019 was still lower.
ICSC, a shopping mall industry group, guess that the number of people going to the mall this weekend is double compared to the same period in 2020.
Consumer spending has surged in the US, fueled by trillions of dollars in government support for economy. Retail trade sales for October increased by 1.9% month-on-month and are nearly 15% higher than October 2020.
The resilience in consumer spending raised concerns among retailers earlier this year that inflation pricing and continued disruptions to global supply chains will reduce demand.
Consumer prices rose 6.2% in October from a year earlier, the fastest increase since 1990, as retailers through higher costs of labor, raw materials and shipping. Dollar Tree, a chain built on selling products for $1 each, announced this week that it will price increase of most of the goods it sells for $1.25.
Last week, Salesforce reported a 16% drop in early-season discounts at its chain stores in the US compared to the same period last year. Adobe found that discounts offered online in some categories, including appliances and furniture, are running at half the rates seen during the 2020 holiday season.
Nearly 59% of US consumers started shop earlier compared to 2020, according to GlobalData, a market research group that, with a similar share, expressed concern that the products they wanted might not be available or delayed.
Last week, Walmart said that with consumers weighing the possibility of a shortage, its frozen turkey sales more than doubled in October from the same month in 2020. Still, the retailer expected there will be “abundant supply”.
U.S. retail inventories have fallen over the past 18 months due to port backlogs and truck driver shortages warehouse space the stores’ complicated efforts to restock the shelves. Through September, retailers had about 33 days of inventory on average, down from about 44 days in September 2019.