A record number of consumers took advantage of last week’s holiday shopping period despite soaring inflation and recession fears.
More than 196 million shoppers flooded stores and online shops during the five-day period from Thanksgiving Day through Cyber Monday, the National Retail Federation revealed on Tuesday. That is nearly 17 million more than last year and the highest figure since the group began tracking the data five years ago.
“That number, of course, exceeded and really shattered our initial expectations by more than 30 million,” NRF President and CEO Matthew Shay said on a call Tuesday with reporters. He noted that the figure is a hefty 10% increase in volume from last year.
The data, which were released in tandem with Prosper Insights & Analytics, is welcome news for retailers because they show that, while sky-high inflation is eating into the paychecks of consumers and interest rate hikes by the Federal Reserve are beginning to dim the economy, shoppers still feel confident enough to go out and spend their money.
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The shadow of the coronavirus still loomed over last year’s shopping season because some consumers feared venturing into busy stores where they could become infected. As the pandemic fades into the rearview mirror, data from this past week show that shoppers have become much more comfortable leaving their homes in pursuit of in-person deals.
Some 122.7 million people shopped at brick-and-mortar stores over the weekend, a sizable 17% increase from last year. Despite the surge of in-person shopping, online shopping didn’t decline and still ticked up by a more modest 2%.
Data from this year also indicated that the holidays were top of mind for shoppers. An overwhelming 97% of shoppers over the past few days were making holiday-related purchases, Shay told reporters. The average amount of money they spent on those items, which included gifts, decorations, and food, was more than $325.
Amid the breakneck inflation and specter of recession, retailers hoped to lure more shoppers this year by offering heavy discounts.
Last year, retailers were struggling to keep products on shelves because of historic supply chain disruptions that were sending ripples throughout the world economy, plus high demand. Now, though, the dynamic has switched, and a glut of inventory is causing retailers to work overtime in order to offload their products — fueling great discounts for consumers.
Indeed, the data collected over the past several days showed that 9 in 10 shoppers felt as though this year’s deals and sales were the same or better than last year.
Inflation has hit consumers hard. Inflation as measured by the consumer price index clocked in at 7.7% in the 12 months ending in October, several times more than the Federal Reserve’s target.
Average real earnings, or how much people are able to take to the bank when inflation is included in the equation, have been declining since early last year. Median weekly real earnings have fallen nearly 4% since the end of 2020.
Shay said that retailers are well aware that consumers are being extra careful with their spending in light of the inflationary plague, noting that shoppers this year were focused on getting value for their purchases. He also pointed out that the discounts weren’t just in brick-and-mortar stores, given retailers’ desire to entice shoppers.
“We know that retailers are responding with convenience, with sales and promotions that are consistent online and in-store,” Shay said. “[Retailers] are really doing everything they can to deliver convenience and try to find ways to support and help their consumers.”
This year also featured an earlier start to the holiday shopping season as stores, wanting to cut their inventory and fearing an economic downturn, began trying to bring in customers earlier than usual.
In 2011, just over half of consumers said they had started their shopping by early November, according to a survey compiled by NRF and Prosper Insights & Analytics. By last year, that number had ballooned to 61%.
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Overall, the data showed that consumers are not backing down from shopping this holiday weekend, a trend that retailers hope will continue right up through the end of the year.
“Many observers predicted that this was going to be a big weekend as we did — I think it’s turning out to be even bigger than we expected in terms of seeing enthusiasm across consumers and the shopping public,” Shay said.
