Signs point to strong US shopping season
NEW YORK: Americans shopped with greater gusto at malls and online this holiday season amid a strong labour market and cold winter weather, retail sales experts said.
Shoppers in the world’s biggest economy spent generously over the ‘Black Friday’ weekend in late November that kicks off the US holiday shopping season, and buying picked up further in December, analysts said.
Retail experts won’t have the final tally on the overall holiday season until January.
That will include figures from the day-after Christmas, ‘Boxing Day’, which is usually one of the busiest shopping days of the year.
But early figures point to a good year overall.
Mastercard SpendingPulse estimated sales growth for the season at 4.9 per cent, the strongest annual boost since 2011.
“Overall, this year was a big win for retail,” said Sarah Quinlan, senior vice president of market insights at Mastercard.
“The strong US economy was a contributing factor, but we also have to recognize that retailers who tried new strategies to engage holiday shoppers were the beneficiaries of this sales increase.”
IHS Markit pointed to strong macroeconomic factors such as a 17-year high in US consumer confidence in November and a 17year low in unemployment that allowed consumers to open their wallets.
Chilly weather in much of the country also supported sales of jackets and other winter apparel, said Chris Christopher, executive director at IHS Markit.
“There was a significant ramp-up of holiday sales,” said Christopher, who shifted his projection midway through December to 4.7 per cent growth for the season from an earlier mark of 4.2 per cent growth.
“Everything is pointing to a good holiday season.”
The passage of a massive tax cut bill by Republicans in Congress and pushed by President Donald Trump also likely lifted spending somewhat, although Christopher noted that “things were going strong before that.”
Analysts also noted the favorable calendar with Christmas falling on Monday and allowing last-minute shopping over the weekend.
The upbeat appraisals boosted shares of leading retailers, a sector that has seen myriad bankruptcies and store closures with the growth of Amazon and other online retailers, at the expense of the traditional American shopping mall.
Most brick-and-mortar chains saw their share prices rise in afternoon trading Monday, including Wal-Mart Stores, up one per cent, Macy’s, up 4.6 per cent, Gap, up 1.5 per cent and mall operator Simon Property Group, up 1.4 per cent.
While the higher stock valuations reflect an improved outlook, most leading chains won’t report earnings until February.
In recent years, retailers have struggled to maintain solid profit margins due to the need for aggressive price promotion and enhanced spending on e-commerce initiatives.
Amazon gained 0.7 per cent after announcing a number of records of its own, pointing to strong increases of ‘Prime’ subscribers and of sales of its artificial intelligence ‘Echo’ devices.
Amazon said its biggest day in terms of customer ‘fulfillment’ – or the delivery of packages to customers from its network of suppliers and warehouses – was December 19.
The most requested recipe to Amazon’s Alexa programme was for chocolate chip cookies, while the most sought-after Christmas carol was ‘Jingle Bells’. — AFP