Crowds expected in malls and stores over Thanksgiving weekend

Large numbers of Americans are expected to return to stores and malls during Thanksgiving and the following days, despite higher prices, product shortages and an early surge in online spending ahead of the formal start of the holiday season.

U.S. consumers are expected to spend between $5.1 billion and $5.4 billion online on Thanksgiving Day, a record for the day, Adobe Analytics said later on Thursday.

Shoppers in the US have already spent $75 billion online since early November. That’s nearly 20 percent more than the same period of 2020 and more than a third of the total $207 billion in online spending Adobe expects for November and December.

Widely divergent earnings announcements from leading chains have set the period between Thanksgiving Thursday and Cyber ​​Monday, the traditional five-day peak of the US retail calendar, as a decisive test of the industry’s health.

Following strong results from big box retailers such as Walmart and Home Depot and disappointing performances from electronics and apparel chains including Best Buy and Gap, investors are looking for clues to the strength of consumer confidence and the resilience of struggling supply chains. ask for support.

A slightly higher number of Americans plan to shop this Thanksgiving weekend than during the same period last year, according to a survey by the National Retail Federation. For people who shop on Black Friday, the day after Thanksgiving, when retailers have historically served hordes of customers, 64 percent planned to go to stores instead of buying online.

That’s a jump from 51 percent a year ago, when Covid-19 vaccines were unavailable and health fears kept most shoppers at home. But it was still below the stock that hit stores in 2019.

ICSC, a shopping center industry group, predicted that twice as many people would visit a shopping center this weekend than in the same period in 2020.

US consumer spending has soared, fueled by trillions of dollars in government support for the economy. October retail sales were up 1.9 percent month-on-month and nearly 15 percent above the October 2020 level.

The resilience of consumer spending has belied retailers’ fears earlier this year that inflationary prices and ongoing disruptions to global supply chains would dampen demand.

Line Chart of Monthly Advance Sales for Retail and Food Services ($Bn) Showing US Retail Sales Accelerated

Consumer prices rose 6.2 percent in October from a year earlier, the fastest growth since 1990, as retailers passed on higher labor costs, raw materials and shipping costs. Dollar Tree, a chain built on selling products for $1 each, announced this week it would raise the price of most of the goods it sells to $1.25.

Early-season discounts at US chains fell 16 percent year-on-year, Salesforce reported last week. Adobe found that the discounts offered online in some categories, including appliances and furniture, were half the level of the 2020 holiday season.

According to GlobalData, a market research group, nearly 59 percent of U.S. consumers started shopping earlier than in 2020.

Walmart said last week that sales of frozen turkeys more than doubled in October as consumers anticipate possible shortages, compared to the same month of 2020. Still, the retailer expected to have “ample inventory.”

US retail inventories have plummeted in the past 18 months as port backlogs and shortages of truck drivers and warehouse space hampered stores’ efforts to replenish shelves. In September, the average retailer had about 33 days of inventory, up from about 44 days in September 2019.

Additional reporting by Jamie Smyth

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