Another year, another sales record: Despite consumers’ continued caution about where and when to spend, retailers witnessed record-breaking sales over Thanksgiving weekend.
In only the five days between Thanksgiving and Cyber Monday, American shoppers spent over $41 billion online, up 8.2% over the same time last year, according to data released by Adobe Analytics on Tuesday. E-commerce transactions increased 14.6% on Black Friday, while in-store and digital retail sales, as measured by MasterCard, up 3.4% from the previous year.
According to Neil Saunders, managing director of the retail consulting firm GlobalData, the customer turned out and opened their wallets. However, he warned, there are limitations.
The largest is one that shops have been dealing with for months: According to Saunders, many consumers still believe that things are rather bleak, so they’re focusing a lot on sales, discounts, and promotions because they want to get the best value for their money.
Vivek Pandya, principal analyst at Adobe Digital Insights, stated that there is now more competition for customers’ wallets due to the deep and abundant holiday season discounts and the growing number of online businesses. According to him, the Thanksgiving shopping period saw a 3% decrease in internet prices compared to the previous year.
Pandya remarked, “You just have so many options for the consumer.” Customers of all income levels can benefit from that pricing environment.
However, not all browsing results in the cash register, and not all retailers are reaping the same benefits.
According to the National Retail Federation, an estimated 126 million individuals made in-person purchases over the holiday weekend, an increase of over 3.7% from the more than 121 million who did so the previous year. However, MasterCard reported that in-store sales increased by just 0.7%, and that although the 197 million online and in-person shoppers it recorded during the holiday weekend were the second-highest on record, there were roughly 3 million more than during the same period last year.
Jessica Moulton, a senior partner at McKinsey, told CNBC on Monday that consumers are now checking out expensive things at four or five merchants before making a purchase, and occasionally they visit physical locations before completing an online order. Some physical businesses are seeing lower foot traffic this season, she continued.
Nevertheless, yearly sales growth is above the 2.6% inflation rate, and several retailers are witnessing sales close to all-time highs. This suggests that a large number of customers are paying more than necessary merely to stay up with price hikes.
Although Black Friday is all about deals, people have been more open to them all year long.
Neil Saunders, GlobalData’s managing director
The same is true of recreational activities.
Moviegoers went to theaters to see Moana 2, Wicked, and Gladiator II, pushing the U.S. box office to a new Thanksgiving weekend record for the first time since the epidemic.The previous peak of $315.6 million set in 2018 was greatly exceeded by the $420 million in total ticket sales.
Travel volumes also increased, surpassing the previous record established on the Sunday after July Fourth, with airport security agents screening almost 3 million passengers on Sunday alone—much higher than the 2.3 million on the same day last year.
About half of Hopper’s users, particularly Gen Z and millennial customers, intend to travel for the same amount of time or longer in the upcoming six months, according to Hayley Berg, chief economist for the flight-finder company, who spoke to CNBC this week.
“They are still keeping that money set aside for travel and experiences, even though they are spending a little bit more on goods,” she added.
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