Record Shoppers Boost Holiday Sales as $1 Trillion Season Looms

A record number of shoppers flocked to stores and online platforms from Thanksgiving through Cyber Monday, setting the stage for what is anticipated to be the first holiday shopping season to surpass the $1 trillion mark. According to the National Retail Federation (NRF) and Prosper Insights and Analytics, nearly 203 million shoppers participated in the weekend festivities, outpacing expectations.

The NRF reported that approximately three-quarters of American adults engaged in shopping during the five-day period, with an average spending of $340. In-person shopping saw nearly 130 million Americans visiting stores, a 3% increase from the previous year. Online shopping also experienced a surge, with around 135 million individuals participating, marking a 9% rise from last year’s figures.

Black Friday and Cyber Monday Dominate

As has become customary, Black Friday emerged as the most popular shopping day. Notably, the Sunday following Thanksgiving attracted a record number of in-store shoppers, reflecting a 27% increase from the previous year. Cyber Monday maintained its position as the second most popular day for online shopping.

NRF CEO Matt Shay expressed optimism about the early holiday shopping trends, stating, “We’re off to a great start here. We’re barely at the halfway mark.” Despite acknowledging concerns regarding the “K-shaped” economy, where affluent consumers thrive while lower-income families struggle, Shay emphasized that individuals across all income levels are prioritizing their holiday budgets, adjusting their spending to find value.

He remarked, “Certainly, we’re seeing the higher-end consumer is outspending, but even lower-end consumers are rotating their wallets.” Shay noted that inflation for goods has stabilized or even decreased over the past couple of years, contributing to consistent retail sales.

Consumer Sentiment and Spending Patterns

Inflation impacts have been more pronounced in services than in goods, with service inflation recorded at 3.5%, compared to an overall inflation rate of 3% as per the September consumer price index. Phil Rist, Executive Vice President of Strategy at Prosper, pointed out that shoppers are increasingly driven by sales and promotions. Many consumers reported that free shipping and limited-time offers influenced their purchasing decisions.

According to Bankrate Senior Industry Analyst Ted Rossman, tariff impacts on holiday prices have been less severe than anticipated. He noted that while consumer sentiment about the economy remains cautious, spending continues to show resilience. “Thanksgiving weekend retail sales came in toward the high end of expectations, showing that consumer spending still has room to run,” Rossman stated.

The NRF predicts that total holiday season sales from November 1 to December 31 will exceed the $1 trillion threshold for the first time, expecting annual growth between 3.7% and 4.2%.

As online spending peaked on Cyber Monday, Adobe reported a total of $14.25 billion in online sales, an increase of more than 7% from the previous year. During the prime shopping hours of 20:00 to 22:00, Americans spent approximately $16 million every minute.

While discounts may decrease from their peak levels, shoppers can still expect to find bargains extending into the first week of December. The NRF identified supermarkets as leading shopping destinations during the holiday weekend, alongside online shopping. Department stores, clothing outlets, and discount retailers also saw significant traffic.

Clothing and accessories were the top gift categories purchased, followed closely by toys, books, and gift cards. The NRF indicated that surveyed shoppers had completed nearly half of their holiday shopping by the time Black Friday and Cyber Monday concluded.

In a climate of evolving consumer behavior and economic dynamics, retailers are expected to continue innovating to meet demand and navigate potential challenges ahead.