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US 2017 Holiday Retail Recap: Season Exceeds Expectations

Fung Global Retail & Technology

KEY POINTS
In this report, we take stock of the 2017 holiday season in the US, providing an overview of retail sales, category winners and returns. We also look at the drivers of this holiday season’s sales growth, including macroeconomic conditions, weather and a favorable calendar effect.

Overall holiday retail sales growth exceeded industry estimates of 3%–4%, reaching 4.9% year over year, according to Mastercard SpendingPulse.
Online holiday retail sales grew by 18.1% year over year, outpacing overall retail sales growth, and Cyber Monday 2017 was the biggest e-commerce day in history in the US.
The electronics and appliances category saw the highest year-over-year growth over the holiday season, with sales rising by 7.5%. Sales in both the home furnishings and home improvement categories grew by a strong 5.1%. Specialty apparel and department stores saw moderate gains.
Technology products accounted for 22% of holiday retail sales in 2016 (latest available). In 2017, the iPhone was the best-selling tech product, with more than 233 million units sold.
Positive macroeconomic conditions, cold and dry weather, and a favorable holiday calendar all contributed to retail sales growth this holiday season. . . .

Weather and Holiday Calendar Were Both Favorable

This year, two factors that were out of consumers’ control proved favorable for retail spending: the weather and the holiday calendar. According to Planalytics, a research firm that tracks the weather’s impact on retail, cold and dry weather in many US regions had a positive impact on holiday sales. The weather in November and December was cooler and drier than last year, particularly in the East, which benefited seasonal apparel categories such as coats, boots, scarves, hats and gloves. The weather was also dry in most areas over key shopping days, including Black Friday, Super Saturday and Friday, December 22, which supported in-store traffic and seasonal demand.

With Christmas Day falling on a Monday in 2017, more shoppers than usual visited stores over the final weekend before Christmas. Also, there was one more shopping day between Thanksgiving and Christmas in 2017 than there was in 2016, with 31 days between the two holidays versus 30 days in 2016 . . .

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