Mixed signals as Target, Walmart and other retailers brace for last-minute holiday rush
By Melissa Repko
With Christmas fast-approaching, retailers are gearing up for a last-minute rush of shoppers.
Stores and retail websites are expected to draw more than 148 million shoppers on Saturday, according to an annual survey by the National Retail Federation and Prosper Insights & Analytics. That’s a slight drop from the final Saturday before Christmas last year, a day known as Super Saturday in the industry. Last year, 150 million consumers were expected to turn out, which was higher than the estimated 147 million shoppers in 2019.
This year, however, that final sprint will be shaped by new and conflicting factors. A strong wave of early holiday shopping means some consumers may have less to buy. Warmer weather in much of the country could make people feel more comfortable driving to the mall or make them feel less in the holiday spirit. And a surge in Covid-19 cases in the Northeast and Midwest could cause gatherings to be canceled or prompt shoppers to shift toward buying online or opting for goods instead of booking trips or concert tickets.
Steph Wissink, a retail analyst for Jefferies, said retailers and investors are watching for clues, but they tell very different stories. Among them, consumer confidence plunged to a 10-year low in November. Retail sales are up, but were weaker than expected in November. And some industry watchers and retail trade groups, including NRF, have predicted record-breaking holiday sales, even in a year of supply chain challenges and inflation. . . .
Options for procrastinators
Target said on Friday that customers can place same-day online orders as late as 6 p.m. on Christmas Eve and pick them up in a couple hours inside of the store or in the parking lot, with no need for a pickup window. . . .
Rosy forecasts – for sales and the weather
The NPD, a major retail trade group, has doubled down on predictions that holiday spending will hit a record high. It projected that sales in November and December could rise 8.5% to 10.5% from last year to between $834.4 billion and $859 billion. It raised that forecast earlier this month, saying that spending was on track to grow by as much as 11.5% year over year. The sales forecast excludes spending at automobile dealers, gas stations and restaurants.
More of those shoppers are early birds this year, however, with a record 42% of people planning to purchase their last gift before Super Saturday, according to an NPD survey in early December. That’s up from 40% a year ago and 30% in 2012, the first year when the trade group asked consumers that question.
More than half (52%) said they expect to pick up last minute gifts in the week before Christmas, according to NPD.
Weather may factor into how much people shop and what they buy, too. This year, the trends leading up to Christmas is expected to favor retail sales, said Evan Gold, executive vice president of global partnerships and alliances at Planalytics, a firm that predicts and analyzes consumer demand. (emphasis added)
Much of the U.S. has had mild temperatures, with this week on track to be one of the warmest mid-December weeks is over 60 years, he said.
Next week, temperatures are expected to be colder than last year in Canada, portions of the Northeast and the West Coast, but warmer than a year ago in the Southeast and Central regions. Rain and snow will largely be concentrated in higher elevation areas on the West Coast.
That means that customers won’t be detracted by inclement weather like ice and snow and can get to the malls and stores — which is key since some retailers’ shipping cutoffs have passed, he said. Though, he noted “light snowfall can be helpful in certain markets to draw seasonal demand.”
In January, on the other hand, temperatures are expected to drop compared with a year ago and help move merchandise at the end of retailers’ holiday quarter, Gold said. That could help clear away cold weather-related items, from sweaters and winter coats to snowblowers, as people redeem gift cards, he said.
Last-minute purchases could also lift sales for some retailers, said Craig Johnson, president for Customer Growth Partners. Jewelry purchases are often made late in the season by procrastinators or people who want to split their big purchases between two credit card statements, he said. Fragrances are another pricey gift that’s often purchased late.
Store traffic made a comeback from a year ago on Black Friday. With the rise of omicron, however, more shoppers may revert back to buying online and retrieving purchases through curbside pickup as they check off the final items on the gift list, Johnson said.
″There will not be a reduction in sales, but a channel shift from in-person to online, going back the other way,” he said.