News for Independent Business Shortest Holiday Shopping Season Possible - Will it Matter?

Shortest Holiday Shopping Season Possible – Will it Matter?


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The day after Thanksgiving through Christmas Eve is the traditional definition of the holiday shopping season. With Thanksgiving falling on November 28 this year, it means that this year’s shopping season is the shortest one possible. The question is, will it even matter?

In the past when we had a short shopping season, it could hurt retail sales considerably as shoppers just didn’t have as much time to get to the store to spend on gifts for their loved ones. As the American consumer has shifted to more online shopping year after year, the shorter shopping season may not even matter.

Early indications from Adobe Analytics showed that sales on Thanksgiving Day exceeded the $4 billion mark and showed an increase of 14.5% from last year. As for Black Friday online sales, as of 9:00 AM ET sales were up 19.2% and were on track to reach $7.4 billion in sales for the day. Adobe is estimating an overall increase of 14.9% in online shopping for the season.

Of course, the huge increases in online sales will likely have a negative impact on in-store sales. Oxford Economics is predicting an overall increase of 4.8% in year over year sales between online sales and in-store sales. As a comparison, 2018 sales increased 2.1% over 2017.

If investors are trying to figure out which companies will see the biggest increases, early indications are that the ones that had momentum heading into the season will maintain that momentum. According to a recent article from Investor’s Business Daily, Walmart has seen an increase of 53% in online spending heading into the shopping season while Amazon has seen an increase of 37%. Best Buy, Etsy, Macy’s, and Nordstrom have also seen substantial increases in online sales. Conversely, EBay, J.C. Penney, and Kohl’s have seen declines.

I have written a couple of articles about the retail sector in the last month as the sector just went through its earnings season and there were hits and misses among the individual companies. Overall though, the retail sector has performed well as the consumer has continued to spend and help the economy. The SPDR S&P Retail ETF is up 19.5% since mid-August while the S&P as a whole is up 10.75%.

Even though consumer confidence has fallen over the last four months and the leading economic index has posted negative results for three straight months, the retail sector has been going strong.

You would think that these indicators can’t run counter to one another for much longer. Either consumer confidence and the leading indicators will have to turn higher and start to improve, or retail sales and consumer spending will turn lower and match the falling consumer confidence.

If it is the latter of the two scenarios, that would seem to confirm the concerns about the economy running into a rough patch starting in 2020. I listed a number of indicators that are pointing to an economic slowdown in my article from earlier this week.

The jump that is expected in holiday spending could be somewhat of a crescendo for consumer spending and then we see a downturn in the first quarter. But for now, things are looking good for many retailers as consumers continue to spend at a faster pace than in previous years.


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