This most unusual of holiday shopping seasons is over. The initial results reflect the pandemic itself: winners, losers, some resilience, and a few hints of the future.
Holiday retail sales rose 3% year over year if you start in mid-October, says Mastercard SpendingPulse, with the pandemic-delayed Amazon.com Prime Day and similar promotions. If you measure from November to Dec. 24, they climbed 2.4%. Online jumped 49% from 2019 levels and accounted for nearly a fifth of all sales. Department stores fell 10%. Furniture was a big winner, rising 16% year over year, and 31% online, while apparel slumped 19%, as folks spent more on homes and less on wardrobes.
Jefferies analyst Janine Stichter notes that the data suggest consumers weren’t deterred from shopping, even if they avoided stores. Consumers were eager to shop “earlier in the season, taking advantage of earlier holiday deals, and looking to avoid store congestion and shipping delays.” Yet the prepandemic bifurcations persisted: Department stores and clothing companies suffered more than other retailers.
Market-intelligence platform Edited notes that discounting was less than in 2019. That, too, is a year-long theme, writes Stichter, “with lean inventory levels (in some case too lean) facilitating significant year-over-year reductions in promo levels.” Consumers shopping earlier and more intentionally also probably led to fewer promotions.
Looking ahead, consumers will return to stores when they feel safe—and they’ll buy clothes again—but there’s no putting the online genie back in the bottle. Analysts expect online sales to keep growing; the pandemic just accelerated the shift.
Next Week
Monday 1/4
Fiat Chrysler Automobiles and Peugeot hold extraordinary shareholders meetings to vote on their proposed merger of equals, valued at nearly $50 billion and first announced 15 months ago. The combined company would be called Stellantis and be the fourth-largest automobile manufacturer by volume.
The Census Bureau reports construction spending data for November. Economists forecast a 1% month-over-month increase, to a seasonally adjusted annual rate of $1.45 trillion. Construction spending, much like the housing market, has rebounded strongly from pandemic-induced lows and currently stands just below the all-time peak of $1.44 trillion set in February of 2020.
Tuesday 1/5
Georgia holds a special election for both of its Senate seats. Majority control of the Senate hangs in the balance, and Democrats can retake the chamber by winning the two races.
The Institute for Supply Management releases its Manufacturing Purchasing Managers’ Index for December. Consensus estimate is for a 56.5 reading, a point lower than the November figure. The Manufacturing PMI has had six straight months of readings above the expansionary level of 50.
Wednesday 1/6
The Federal Open Market Committee releases minutes from its mid-December monetary-policy meeting.
ADP releases its National Employment Report for December. Expectations are for a gain of 200,000 in private-sector employment, after 307,000 jobs were added in November. The vast majority of gains in November came from the services sector, led by the leisure and hospitality industry’s 95,000.
Thursday 1/7
Conagra Brands, Constellation Brands, Lamb Weston Holdings, Micron Technology, and Walgreens Boots Alliance report quarterly results.
The ISM releases its Services Purchasing Managers’ Index for December. Economists forecast a 54.7 reading, below November’s 55.9 figure.
The Department of Labor reports continuing jobless claims, which are also known as insured unemployment, for the week ended Dec. 26. Unlike initial jobless claims, continuing claims have maintained their downward trend into December. For the first three weeks of last month, continuing claims averaged 5.3 million a week, down from a peak of 22 million in May.
Friday 1/8
The Bureau of Labor Statistics releases the jobs report for December. Consensus estimate is for an increase of 114,000 in nonfarm payrolls, after a rise of 245,000 in November. The unemployment rate is expected to edge up from 6.7% to 6.8%. The economy has added back 12.4 million jobs since May, or just more than half of the 22.2 million jobs lost in March and April.
Write to Teresa Rivas at teresa.rivas@barrons.com
January 01, 2021 at 07:12AM
https://www.barrons.com/articles/the-state-of-holiday-retail-a-little-good-a-little-bad-51609459967
The State of Holiday Retail: A Little Good, a Little Bad - Barron's
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