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Data Points to Ho-Hum Holiday, Consumer Confidence Wanes

The early read on holiday is continuing to come into focus.

Consumers were out shopping—both in-store and online—but the registers didn’t ring quite as they did last year.

That was the headine from a survey of 5,759 adults over the holiday shopping period from Thanksgiving Day through Cyber Monday from the National Retail Federation (NRF) and Prosper Insights & Analytics, released on Tuesday.

In general, the consensus so far has been that holiday shopping began earlier this year and that pulled some sales forward into October. Many are attributing this year’s early start to well-publicized supply chain challenges. Retailers also made an effort to get consumers into the stores early when shelves were still stocked in case of delayed inventory receipts due to port congestion or other transportation issues.

Tuesday also saw a decline in November’s Consumer Confidence Index from The Conference Board. The Index is now at 109.5, down from 111.6 in October. Both components saw declines, with the Present Situation Index down to 142.5 from 145.5 last month and the Expectations Index down to 87.6 from 89.

“While there are plenty of shortages throughout the economy, there is no shortage of factors that could be weighing on confidence,” economists at Wells Fargo said in a report. They cited factors such as inflation at the highest its been in a generation, choppy financial markets and general holiday stress complicated by rising Covid concerns. The cut-off date for The Conference Board’s survey was Nov. 19, before the world learned of the new Omicron variant. And while the labor market seems bright with more jobs available than the reported number of unemployed, inflation expectations—at 7.6 percent—could have played a role in dampening confidence.

Some businesses have been passing along their higher costs onto consumers. And while Black Friday sales may have been strong, the sense was there weren’t the deep promotional discounts seen in past years, the economists noted.

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So just exactly how did the five-day holiday weekend fare?

According to the NRF-Prosper survey, 179.8 million unique shoppers made in-store and online purchases during the holiday weekend, exceeding NRF’s initial expectations by over 21 million. But that figure—even if in line with the average of the last four years—was down from the 186.4 million shoppers over the same period in 2020. Nearly half, 49 percent, of shoppers said they took advantage of early holiday sales or promotions before Thanksgiving this year.

Retailers saw increased traffic over the five-day period according to the survey, with 104.9 million shoppers visiting stores, up from 92.3 million in 2020. That uptick also saw a corresponding slip in the overall number of online shoppers to 127.8 million from 145.4 million last year.

Of the five days, Black Friday remained the most popular in-store shopping day, with 66.5 million shoppers, followed by 51 million on Small Business Saturday. And similar to recent years, Black Friday surpassed Cyber Monday in terms of total online shopping, NRF said. Eighty-eight million people shopped online on Black Friday, versus 77 million on Cyber Monday.

Separately, data from Sensormatic Solutions on in-store shopping traffic indicated that shopper visits resulted in a 21.7 percent decline in footfall for Black Friday weekend when compared to 2019, although it was up 34.2 percent when compared with 2020. Store visits on Thanksgiving Day fell 90.4 percent, likely because many retailers elected to close their doors that day. While Black Friday store traffic fell 28.3 percent versus 2019, it remains the busiest in-store shopping day of the holiday season. Traffic in physical stores fell 9.9 percent on Cyber Monday.

With shopping beginning earlier, NRF president and CEO Matthew Shay said at a press conference Tuesday that Black Friday and the holiday weekend now feels more like “half time,” although the good news about the increase in foot traffic this year indicates that consumers were finally “more comfortable” being inside a store.

He remained fairly optimistic about the balance of the holiday season. “A substantial amount of commerce remains with 80 percent of respondents to our survey expecting to continue to see great deals for the rest of the season,” Shay said, adding that overall holiday spending so far has the trade group continuing to “expect a record” holiday season.” The organization is forecasting holiday sales to grow between 8.5 percent and 10.5 percent.

“Over the last few years, Black Friday has emerged as a powerhouse day for both in-store and online shopping,” Phil Rist, Prosper’s executive vice president of strategy, said.

Rist said shoppers plan to spend an average of $301.27 on holiday-related purchases, down slightly from $311.75 in 2020. Top gift purchases over the weekend included apparel and accessories, which were bought by 51 percent of those surveyed, followed by toys at 32 percent and gift cards or certificates at 28 percent.

Rist noted that 84 percent of holiday shoppers have already started shopping and have completed more than half, 52 percent, of their holiday purchases, on average.

Other survey data points showed that the most popular shopping destinations included online at 46 percent and department stores at 44 percent. Discount retailers trailed at 28 percent.

Separately, Shay addressed concerns over recent flash mobs conducting smash-and-grab thefts at many retailers. He called the trend challenging, and said hundreds of retail executives were on a call discussing what was happening and concluding that more resources from federal, state and local authorities were needed to combat the problem. The NRF CEO said the trade group will work with law enforcement, the Biden administration and Congress on a variety of proposed legislative measures and will take on a “more aggressive position” going forward.