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THANKSGIVING DAY WEEKEND SALES START STRONG,
PARTICULARLY ONLINE, SAY INITIAL REPORTS

 

Black Friday, the official start to the holiday season appeared start of the right foot, with overall sales rising 12 percent year on year in the crucially important U.S. market, according to Mastercard SpendingPulse, and the strongest category performer being apparel, including jewelry, where sales were 19 percent higher than last year.

Over the past several years, Black Friday was followed by Cyber Monday, which many considered the kickoff to the online sales season. But according to most reports, the increase ecommerce sales surpassed the rise in instore sales, which Mastercard SpendingPulse said respectively rose by 14 percent and 12 percent.

“With holiday promotions kicking off long before the Thanksgiving weekend, consumers have been shopping strategically for the season’s best deals,” said Michelle Meyer, chief economist in North America for Mastercard Economics Institute. “Retailers delivered on Black Friday with deals that enticed consumers to fill their carts despite the inflationary environment.”

The National Retail Federation (NRF) expects more than 166 million Americans are expected to shop either in-person or online over the five days from Thanksgiving Day through Cyber Monday, making it the organization’s highest prediction since it began tracking data in 2017.

A RECORD DAY FOR E-COMMERCE

While some were already declaring the strong performance of the online sales sector as being indicative of its dominance, others cautioned that such announcements were grossly premature. Online retailers are able results almost in real time, they point out, while brick and mortar retailers need the dust to clear before tallying up their figures.

NRF still expects traditional brick-and-mortar stores to account for the majority of retail holiday spending, with its pre-Thanksgiving Day survey suggesting that 67 percent of Black Friday shoppers intended to head physically to stores.

Be that as it may, according to Adobe Analytics Black Friday sales in the United States brought in a record $9.12 billion, more than the $8.92 billion in 2021 and $9.03 billion the previous year.

Adobe said it expected shoppers would spend another $4.52 billion on Saturday and $4.99 billion on Sunday, with Cyber Monday surpassing Black Friday online sales, will sales of $11.2 billion.

All this occurred with consumers concerns at the highest level since the Great Recession in 2008 and 2009, with the NRF reporting that higher than 60 percent of Americans said the economy would impact their holiday spending plans. However, concerns about a possible dip in sales spurred many retailers to offer steep discounts, and that could have been a deciding factor.

CONSUMER CONFIDENCE REMAINS LOWISH

The Conference Board will only release carefully watched consumer confidence index for November after the Cyber Monday, but many were predicting that the measure, which had declined in October after to back-to back monthly gains to stand at 102.5, might even fall below the 100 mark. As it was, the index slipped to 100.2 (1985=100), down from 102.2 and the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—declined to 75.4 from 77.9.

“Inflation expectations increased to their highest level since July, with both gas and food prices as the main culprits. Intentions to purchase homes, automobiles, and big-ticket appliances all cooled. The combination of inflation and interest rate hikes will continue to pose challenges to confidence and economic growth into early 2023,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board, when the index was released last month.

But analysts at University of Michigan, who also produces a consumer confidence index and published it before the Conference Board, said they were mildly surprised that theirs has dipped less than expected, and inflation expectation were also down.

The University of Michigan’s consumer confidence had receded from a reading of 59.9 in October to 56.8 in November, but that was better than the preliminary reading of 54.7 which had been announced about two weeks earlier.

Joanne Hsu, the University of Michigan’s survey director noted that the decline in October had offset roughly a third of the gains made since June, when the index had stood at a record low.

She said this had been the result of inflation, lower asset values and a softer labor market expectation.

Whether a strong Thanksgiving Day will have the effect of alleviating consumers anxiety, leading to a strong holiday season overall, still remains to be seen.