Holiday Shopping Season Off To A Smashing Start: 5 Winners
Zacks Investment Research | Nov 27, 2018 07:37AM ET
Consumers have thronged stores and logged onto online sites for the best bargains from Thanksgiving Day to Cyber Monday. As widely expected, a healthy economic backdrop and a two-decade high consumer confidence have provided the wherewithal for such high spends.
It goes without saying that retailers have started off the 2018 holiday shopping season with a bang, which undoubtedly calls for investing in the space.
Happy Holidays for Retailers?
Black Friday and Thanksgiving Day sales have been massive this year. Mastercard (NYSE:MA) total spend for Black Friday (online and offline) was $23 billion, up nearly 9% from the day after Thanksgiving last year. Mastercard has projected a 5% rise in holiday sales from November 1 through Christmas Eve this year compared to last year.
Mastercard senior advisor Steve Sadove agreed that “both online and in-store sales are tracking very well.” Brian Field, senior director of global retail consulting for ShopperTrak, added that “the fact that the shopper visits remained almost the same this year compared to the last three years proves that the notion of Black Friday not being popular anymore is a myth and that retailers are in for a successful holiday season.”
Adobe (NASDAQ:ADBE) Analytics that predominantly tracks digital sales further said that online purchases on Black Friday climbed 24% to $6.2 billion compared to last year. In fact, many shopped on their smartphones on Thanksgiving.
Online sales during Thanksgiving were $3.7 billion, up 28% from a year ago. This marked the fastest growing online sales in history on Thanksgiving Day, added Adobe. The Thanksgiving Day also turned out to be the first day in 2018 to see $1 billion in sales on smartphones. Notably, Kohl's Corporation (NYSE:KSS) had said that it had a record day for digital sales on Thanksgiving, while Walmart Inc. (NYSE:WMT) and Target Corporation (NYSE:TGT) acknowledged strong online traffic.
Nonetheless, Customer Growth Partners summed up by saying that the overall four-day Black Friday weekend sales totaled a whopping $60 billion. While consumer electronics and appliance sales jumped 6.4%, apparel sales climbed 5.4% — the best since 2011.
Cyber Monday Sales on Pace to Hit a Record High
Internet sales, by the way, were on pace to hit $7.8 billion by the end of Cyber Monday (Nov 26), marking the largest online shopping day on record, per Adobe. In fact, Adobe added that online sales are likely to touch a staggering $124.1 billion this holiday shopping season.
Deloitte strengthened the spirit by announcing that e-commerce sales are projected to increase 17% to 22% compared with last years’ holiday season, which came in at $109.9 billion. Notably, most of the purchases are widely expected to be made via mobile devices, according to market-watcher App Annie.
The top online products included Little Live Pets in toys, Nintendo Switch in video games and Roku in streaming devices, with Cyber Monday offering massive discounts on toys.
Catalysts Behind the Rise in Spending
The strong holiday sales are being fueled by a healthy economy and high levels of consumer confidence. The U.S. economy got a boost in the third quarter, with GDP increasing at an annualized pace of 3.5%, per the U.S. Commerce Department. In fact, the country’s total output of goods and services followed an even stronger 4.2% growth in the second quarter.
The U.S. economy, thus, in the last two quarters recorded the fastest six-month growth in four years and is on track to hit the Trump administration's annual growth target of 3%. If that happens, it would be the best yearly performance since 2005, two years before the Great Recession.
At the same time, consumers in America are currently most confident in almost two decades, courtesy of a healthy labor market. The consumer confidence index climbed to 137.9 last month from 135.3 in September, per the Conference Board, a business research organization (read more: Zacks Investment Research
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