Entertainment

Holiday sales set to hit record $207 billion


Retailers are on track to hit record sales this holiday season despite bargain hunters not finding the usual amount of Black Friday deals because of inflation and supply chain issues.

Shoppers spent slightly less online during Black Friday this year, with many venturing back to physical stores despite coronavirus fears, tight supplies and retailers’ efforts to encourage earlier holiday purchases.  

For November and December, online sales are estimated to hit a record $207 billion, up 10 percent from last year, according to Adobe Digital Economy Index. 

Meanwhile, the National Retail Federation has forecast combined brick-and-mortar, and online holiday sales to reach between $843.4 billion and $859 billion, an 8.5 percent to 10.5 percent spike from last year.

‘Even though the holiday season should be okay from a sales standpoint – because retailers are discounting less – the margins won’t necessarily be higher because of inflation,’ said Forrester Research analyst Sucharita Kodali.  

People shop at Macy’s Herald Square store during Black Friday in New York. Shoppers spent slightly less online during Black Friday this year, with many venturing back to physical stores despite coronavirus fears, tight supplies, and retailers’ efforts to encourage earlier holiday purchases

Shoppers exit a Target store during Black Friday sales in Brooklyn. For November and December, online sales are estimated to hit a record $207 billion, up 10 percent from last year, according to Adobe Digital Economy Index

Shoppers exit a Target store during Black Friday sales in Brooklyn. For November and December, online sales are estimated to hit a record $207 billion, up 10 percent from last year, according to Adobe Digital Economy Index

Shoppers' total outlay online during Black Friday was roughly $8.9 billion, less than the $9 billion in 2020, while spending online during Thanksgiving was flat at $5.1

Shoppers’ total outlay online during Black Friday was roughly $8.9 billion, less than the $9 billion in 2020, while spending online during Thanksgiving was flat at $5.1

Many retailers closed physical stores on Thanksgiving this year, as they did in 2020, amid a labor shortage and the coronavirus pandemic. 

Stores reopened on Friday, and shopper visits increased by 47.5 percent compared to 2020, but fell by 28.3 percent when compared to 2019, the last pre-pandemic year, according to data from Sensormatic Solutions.

This year, stores had the lowest level of clearance goods on sale in five years or more, Cowen analysts said. 

Shoppers’ total outlay online during Black Friday was roughly $8.9 billion, less than the $9 billion in 2020, while spending online during Thanksgiving was flat at $5.1 billion, Adobe said.

For the first time ever, spending online during Black Friday – traditionally one of the biggest shopping days of the year – fell, reversing the growth of recent years.  

But the ongoing coronavirus pandemic and its effect on supplies have likely driven shoppers out early, as evidenced by a recent Commerce Department report showing US retail sales surged in October. 

Shoppers also discovered that many US retailers offered smaller price markdowns this year amid tight supplies.  

Elver Gomez, a 21-year-old student in Chicago, said he didn’t find the Apple and Microsoft laptops he wanted while shopping at a Best Buy store Friday morning. ‘It seems like this year it’s either out of stock’ or for sale at what he said was ‘not that great of a price.’ Best Buy added a message to its website warning of ‘limited qualities’ and ‘no rainchecks.’

Electronics – in short supply due to the global chip shortage – had the highest out-of-stock levels, followed by personal care, and home and garden, according to Adobe. Through most of November, out-of-stocks were up 261 percent versus 2019. 

For November and December, online sales are estimated to hit a record $207 billion, up 10 percent from last year, but a smaller year-to-year increase than years before

For November and December, online sales are estimated to hit a record $207 billion, up 10 percent from last year, but a smaller year-to-year increase than years before 

People line up to enter a store during Black Friday shopping at Fashion Outlets of Chicago in Rosemont of Greater Chicago Area

People line up to enter a store during Black Friday shopping at Fashion Outlets of Chicago in Rosemont of Greater Chicago Area

Shoppers looking for Black Friday deals go to Walmart, Home Depot, Best Buy and Costco in Norwalk, Connecticut. For the first time ever, spending online during Black Friday - traditionally one of the biggest shopping days of the year - fell, reversing the growth of recent years

Shoppers looking for Black Friday deals go to Walmart, Home Depot, Best Buy and Costco in Norwalk, Connecticut. For the first time ever, spending online during Black Friday – traditionally one of the biggest shopping days of the year – fell, reversing the growth of recent years

Many retailers closed physical stores on Thanksgiving this year, as they did in 2020, amid a labor shortage and the coronavirus pandemic. Stores reopened on Friday, and shopper visits increased by 47.5 percent compared to 2020, but fell by 28.3 percent when compared to 2019

Many retailers closed physical stores on Thanksgiving this year, as they did in 2020, amid a labor shortage and the coronavirus pandemic. Stores reopened on Friday, and shopper visits increased by 47.5 percent compared to 2020, but fell by 28.3 percent when compared to 2019

Retailers lured to make holiday purchases online as early as September this year, because the supply-chain logjam has prevented them from quickly replenishing year-end merchandise.   

Supply-chain challenges and shipping delays may have prompted shoppers to visit stores in order to increase the chances of securing gifts in time for Christmas.

On Black Friday, the World Health Organization named the newly identified omicron variant of the coronavirus as a ‘variant of concern,’ triggering worldwide alarm and a selloff in the US stock market. 

Shares of big department stores that typically draw heavier traffic during the holidays are set to increase, including Macy’s, Kohl’s and Nordstrom, as well as companies with consumer brand favorites, like Apple.

Shares of Macy’s shot up last week after the company raised its sales and profit outlooks and signaled it was well stocked for the holiday season.

Macy’s, Walmart, Target and Kohl’s gave shoppers the flexibility to shop online, in stores or through hybrid methods, and walked away as winners on Black Friday, said Louis Navellier, chairman of investor Navellier & Associates.

Retailers lured to make holiday purchases online as early as September this year, because the supply-chain logjam has prevented them from quickly replenishing year-end merchandise

Retailers lured to make holiday purchases online as early as September this year, because the supply-chain logjam has prevented them from quickly replenishing year-end merchandise

Shoppers also discovered that many US retailers offered smaller price markdowns this year amid tight supplies

Shoppers also discovered that many US retailers offered smaller price markdowns this year amid tight supplies

Several retailers - including Walmart, Target and Best Buy - are expected to post lower fourth-quarter profit margins because of tight inventory and higher costs for raw materials, freight and labor

Several retailers – including Walmart, Target and Best Buy – are expected to post lower fourth-quarter profit margins because of tight inventory and higher costs for raw materials, freight and labor

Of those purchasing online, slightly more used their smartphones. Canadian e-commerce company Shopify said the number of shoppers on its platform who used smartphones to make purchases increased this year to 72 percent from 67 percent last year.

Retailers’ moves to encourage buying holiday gifts earlier could also lessen the importance of Cyber Monday, the first Monday after Thanksgiving.  

Stores on Black Friday had the lowest level of clearance goods for sale in five years or more. Many shoppers chose to pick up merchandise curbside rather than venturing inside stores.

Walmart and Target stood to outperform other retailers in part because of their buy-online-pick-up-at-store services. 

Target added more than 18,000 ‘drive-up’ parking spaces, more than doubling spots versus last year. 

The company said its most popular Black Friday deals included $219.99 for a KitchenAid professional stand mixer that regularly sells for $429.99, and savings of up to $60 on Apple Watches and AirPods.

Several retailers – including Walmart, Target and Best Buy – are expected to post lower fourth-quarter profit margins because of tight inventory and higher costs for raw materials, freight and labor.  



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