Proprietary Data Insights
Your winter forecast
This holiday season, big spenders mask those who aren’t spending.
Covid’s Omicron emergence will likely exacerbate the gap.
Workers carry more leverage than ever before. But that doesn’t mean it’s the same everywhere.
Driven by uncertainty, lower-income consumers continue to hold back spending.
It takes years to change that psychology, something that didn’t happen until nearly a decade after the Great Recession.
Higher sticker prices also make them less likely to shell out for gifts.
Without typical deals on Thanksgiving and Black Friday, these consumers aren’t incentivized to head to the stores.
This likely contributed to lower year-over-year Black Friday sales for the first time ever.
That said, as we note in our main story, discount retailers like TJ Maxx (TJX) are doing extremely well at the moment.
And if low-income consumers are likely to spend anywhere, it would be at discount retailers like TJ Maxx.
Black Friday Volume Misses Expectations
Shoppers returned to brick and mortar stores on Black Friday this year.
The National Retail Federation predicted an 8.5%-10.5% increase in holidays sales vs 2020, putting total sales for November & December at $843.4 & $859 billion respectively.
However, data from Adobe Analytics, Mastercard, and RetailNext paint a gloomy picture for retail.
BNPL, mobile shopping, and curbside pickup usage all hit record levels this year.
Retail analysts aren’t sure Black Friday sales paint an accurate portrait.
Many customers chose to order well in advance of the holidays to ensure on-time order delivery, spreading out spending over a longer period.
Companies like Amazon set up deals at the beginning of November to spread out order traffic.
Additionally, the heavy movement towards online retail favors Cyber Monday over traditional Black Friday deals.
Adobe predicts Cyber Monday sales to land between $10.2–$11.3 billion today, around the $10.9 billion spent last year.
The Bottom Line: Don’t take the lackluster Black Friday sales as a harbinger of doom. The bigger picture won’t be revealed until midway through December.
Yes, companies like Gap (GPS) and others struggled to contain inflation and supply chain problems.
But others are doing remarkably well, especially discount retailers like TJ Maxx (TJX).