The holiday shopping season got off to a slow start in the U.S. this weekend, with consumers cutting spending by an estimated 11 percent and fewer bargain hunters hitting stores than predicted.
Consumer spending fell to an estimated $50.9 billion over the weekend, down from $57.4 billion in 2013, according to the National Retail Federation. The average shopper spent an estimated $380.95 over the weekend, a 6.4 percent drop, according to an NRF-commissioned survey of more than 4,600 people by Prosper Insights & Analytics.
Consumers were unmoved by retailers’ aggressive discounts and longer Thanksgiving hours, raising concern that the industry won’t be able to pull out of a slump. The NRF had predicted a 4.1 percent sales gain for November and December — the best performance since 2011. Still, the group cast the latest numbers in a positive light, saying it showed shoppers were confident enough to skip the rush for discounts on Black Friday weekend, which follows Thanksgiving.
“The holiday season and the weekend are a marathon not a sprint,” NRF Chief Executive Officer Matthew Shay said on a conference call. “This is going to continue to be a very competitive season.”
The Washington-based NRF had predicted that 140.1 million shoppers would visit retailers this weekend, a small decline from last year’s 140.3 million. Instead, only 133.7 million showed up — despite many stores extending their hours during Thanksgiving to boost sales.
Holiday shopping is key for retailers, with sales in November and December accounting for about 19 percent of annual revenue, according to the NRF. The industry’s focus now shifts to Cyber Monday, when e-commerce sites put out a fresh wave of discounts. Almost 127 million Americans will shop online Monday, Prosper predicts, though that number also is down from a year earlier. The firm estimated that 131.6 million shoppers participated in Cyber Monday in 2013.
Retail chains are counting on online sales to help make up for slower foot traffic, though brick-and-mortar stores have struggled to keep pace with Amazon.com Inc. Shoppers plan to do 44 percent of their gift buying on the Web, the highest percentage ever, the NRF said last month.
Online sales gained 14 percent on Thanksgiving Day and 9.5 percent on Black Friday, according to International Business Machines Corp.’s Digital Analytics Benchmark. Comparable sales at Amazon, the world’s largest online retailer, rose about 26 percent on Thanksgiving and 24 percent on Black Friday, according to ChannelAdvisor Corp.
Cheaper gasoline prices, meanwhile, are working in the retail industry’s favor. The average cost of a gallon of regular gasoline was $2.81 earlier this week, the lowest in four years, according to the automobile group AAA. That’s leaving more money in shoppers’ wallets — and making it less expensive to take a trip to the mall.
For many shoppers, though, the excitement of Black Friday sales may have simply worn off. Consumers know they can get discounts throughout the holiday season and are adjusting their shopping accordingly, said Simeon Siegel, a New York-based analyst at Nomura Holdings Inc.
“You can’t outsmart the consumer anymore,” he said. “You need to pander to where the consumer wants to shop and when.”
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