Retailers are uncertain about the approach of the holiday shopping season | Jobs Reply

There is still no consensus on the pace of retail sales during the Black Friday weekend, an unusual outcome that is causing mixed forecasts for the holiday shopping season and creating uncertainty for investors and analysts heading into next year.

Companies use various metrics to calculate sales or track different sales segments, but past statistics often show similar trends. “This is the most imperfect year for Black Friday and holiday data I’ve seen,” said Melissa Minkow, director of marketing strategy at digital consultancy CI&T.

Salesforce Inc., for example, said that US sales on the Internet increased by 10% from Thanksgiving to Cyber ​​Monday​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ But Adobe Inc. it says online sales were up 4% to $35.3 billion during that period.

There seems to be an emerging consensus that sales growth was slow at the start of the holiday shopping season, Minkow said. But some say that growth is caused by inflation, while others say that inflation varies by sector, making it difficult to know the impact. Most data sets that track retail sales are not adjusted for inflation as they were established years ago when US inflation was muted. In November the inflation rate was 7.1%.

Salesforce says higher inflation explains the increase in Black Friday online sales, so actual sales growth would have been in the low single digits. Meanwhile, Adobe says its analysis shows that e-commerce prices fell slightly in November so that “strong consumer spending” that month was “driven by new demand and not just higher prices.”

“The economy is in a state of confusion for everyone,” Minkow said. Even a slight drop in retail sales should be considered a “win” given how high inflation is and concerns about a US recession next year, he said.

There is also conflicting data about the effects on physical stores during the Black Friday shopping weekend. The NPD Group said same-store sales fell 5%, in line with data from location analytics firm showing a drop in foot traffic, particularly at US stores. However, the National Retail Federation, a trade association, says traffic increased 17% in the five days from Thanksgiving to Cyber ​​Monday.

NRF predicts growth in online and in-store sales between 6% to 8% compared to the previous year and says inflation will not dampen that expansion. “What we expect is for us to have real growth, in line with inflation during the holiday season,” the group said in a statement.

Taken together, the data disparity muddies the picture for the last half of the holiday shopping season — through 2023.

More than in years past, “retailers don’t know what their first and second quarters are going to look like,” said Matt Katz, managing partner at SSA & Co. consultancy. “Many leaders have lived 7 to 10 years of growth. . We have entered a different era.”

The performance of the retail industry on Black Friday showed that consumer demand for clothing, accessories and other items is decreasing, said the UBS analyst team led by Jay Sole. That trend worsened in the following weeks.

US consumers’ willingness to spend fell by about 16% in December compared to the same period in 2019, analysts said in a research report published this month. That’s the biggest drop since the start of the Covid-19 crisis and the weakness is happening across all income figures. Fewer consumers say they don’t have enough savings and feel “insecure or financially insecure,” Sole said.

“We also see a high risk that the US Federal Reserve’s interest rate hike will be more harmful to consumer spending than expected,” said Sole. In the clothing and accessories industries, he added, new data points show that “sales trends will deteriorate.”

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