Real-time T5 feedback; In-store holiday shopping; Inventory trends
Our Traditional Retail team’s real-time holiday research suggests late-November sales performance was mixed across categories and channels. Feedback suggests end of November sales were below brand expectations across key Black Friday categories such as small appliances, electronics and home. Toy category sales sound roughly in line with brand expectations, showing Y/Y growth on average. Softlines and apparel category sales appeared to outperform brand expectations.
Sales trends appeared to be limited by inventory out-of-stocks, less promotional activity, a 1st-of-the-month shift vs. 2019, and some demand pull-forward into late-October/early-November. The latter point is supported by our holiday consumer research published earlier this quarter, in which 43% of respondents started holiday shopping by the beginning of October (or earlier), with supply chain challenges, better deals/lower prices, and product availability being some of the top reasons. At the time the survey was conducted (early October), 30% of consumers planned to shop Thanksgiving Day, 50% planned to shop Black Friday, and 31% planned to shop Cyber Monday.
Are consumers returning to in-store shopping this year?
Despite less promotional activity from retailers, some consumers showed up for in-person shopping after opting to stay home during the 2020 holiday season. At the Mall of America, the country’s largest mall, ~100,000 people initially shopped in person on Friday, double 2020 numbers but a bit less than 2019. Nationally, traffic at retail stores on Black Friday dropped 28% compared to 2019 levels. With much uncertainty around the consumer’s post-pandemic “new normal”, these in-store shopping figures suggest a meaningful degree of stickiness in eCommerce penetration above and beyond pre-pandemic levels as consumers have grown accustomed to the comfort and convenience of shopping from their homes, particularly compared to the hustle and bustle that often comes with shopping in-store during the Black Friday promotional period.
Holiday inventory trends
Our work suggests inventory out-of-stocks stayed fairly steady in late-November relative to feedback ~30 days ago. In-stock levels are expected to remain constrained in December, although brand feedback sounded slightly more optimistic on the December inventory outlook vs. November. An improved supply situation coupled with softer T5 sales could be leading to pockets of heavier-than-expected inventory, which may result in incremental promotional activity in December to avoid the inventory overhang into January.
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