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Super Saturday’s Numbers Are in—Were Retail Sales Naughty or Nice?

Super Saturday was the best ever, with sales hitting a record $34.4 billion that outpaced Black Friday‘s total, marking the largest single day in U.S. retail history, according to retail consultancy Customer Growth Partners.

This year’s total bested 2018’s record $31.9 billion in Super Saturday sales, coming in about 10 percent higher than last month’s $31.2 billion Black Friday haul. CGP last week had predicted Super Saturday sales to hit $34.0 billion, with in-store sales reaching $26.5 billion and online sales at $7.5 billion.

CGP’s holiday analysis was conducted by its 18-member research field team, which checked 50 major retailers using 100 benchmark mall and off-mall shopping venues that the firm has tracked since 2005.

“After a warm fall that depressed October and early November outerwear sales, retail has gained speed ever since, peaking on Super Saturday–and Sunday was no slouch as well,” CGP president Craig Johnson said. “Paced by the ‘Big Four’ mega-retailers–Walmart, Amazon, Costco and Target–Super Saturday was boost by the best traffic our team has seen in years.”

Even “the long-ailing department stores” saw a lift from the strong “spending momentum,” he added, noting that the sector saw its “best weekend of the season.”

Among CGP’s data points, robust job and wage growth and healthy household finances help drive increases in sales, while online sales cumulatively contributed 58 percent of the year-over-year growth in holiday retail spending. While transaction growth was seen across most retail sectors, off-price channel saw the strongest expansion. And while foot traffic was down at most malls, conversion rates rose and helped to offset the weakness, CGP said.

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That would be good news for retail, meaning that it has a good shot of hitting the consensus outlook of 4 percent growth for the holiday season.

“The question is whether the stellar momentum leads to sustained economic growth into 2020 and beyond,” Johnson said. “The week after Christmas, retail’s ‘second season,’ is now the third biggest holiday week–and may be an early ‘tell’ for the consumer outlook.”

One negative was the apparel sector, which was hurt as women are doing more tech spending, comprising 50 percent of customer traffic at Best Buy and Apple, CGP noted.

“I think retailers will hit 4 percent, but probably barely. There is so much promoting–almost everything is on sale,” Walter Loeb, retail consultant and former analyst, observed.

Heavy promotions deep in the first days of the season helped garner early sales for retailers, but that only helped to offset the traditional lull expected between Thanksgiving week and the run up to Super Saturday.

Traffic slowed in the weeks between the Thanksgiving holiday weekend and Super Saturday, hurt this year too by the storms that hit across much of parts of the U.S. in the past two weeks, suggesting that the final push in the days before Christmas Day would be filled with pressure to grab market share.

All may not be lost as “holiday shoppers have recently delayed spending until closer to the holidays,” Kimberly C. Greenberger, retail analyst at Morgan Stanley, said. Retailers in general have been hosting elevated holiday promotional activity, she added.

And on one December day, her team’s retail checks saw 18 shoppers on line at the register of Pink’s, part of Victoria’s Secret. That’s an indication that “heightened promotional activity may be successful at driving sales at the expense of margins,” Greenberger said.

How margins shake out for retailers–and how kind the holiday selling season was to them–won’t be known until they either provide an early read on holiday sales in January or when they post fourth-quarter results.

As for the sales that were seen over the weekend, American Eagle Outfitters’ intimates brand Aerie was offering 50 percent off its collection, versus the 40 percent to 60 percent off offered last week and in 2018, according to Dana Telsey, analyst at Telsey Advisory Group.

Among other promotions Telsey’s firm tracked: Kate Spade, part of Tapestry Inc., offered an extra 40 percent off sale styles versus the extra 30 percent off such items last year, while Capri-owned Michael Kors is again holding its Big Winter sales, but this year promoting up to 70 percent off new markdowns, compared with up to 60 percent off last year.

Old Navy offered discounts of up to 75 percent off everything, as compared with up to 50 percent off last week, and equal to year-ago markdowns. And Ralph Lauren offered 40 percent off purchases, plus 10 percent off stocking stuffers. That compared with last year’s 40 percent off purchases of $125 and more, plus an extra 10 percent off select stocking stuffers.

And two brands–Loft and Ann Taylor–that have been pressured have also increased the promotions on their offerings. Loft increased its discount to up to 60 percent off, compared to 40 percent to 50 percent off last week. Ann Taylor is now 50 percent off on purchases, but last week the discount was 50 percent off three full price items, 40 percent off two full price items and 30 off one full-price item.

A key issue is its merchandise—the tailored apparel it sells for women who work is not what many women are choosing to wear for work. The company is changing its merchandise mix, but a lot of that won’t be on the sales floor until Spring 2020.