Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
US online shopping hit record highs on Thanksgiving Day and is expected to surge through the holiday weekend, as Black Friday sales fuel bumper consumer spending in the world’s biggest economy.
Shoppers spent more than $5.5bn online on Thanksgiving Day, an all-time high, according to Adobe Analytics, a data provider that tracks sales from 85 of the top 100 internet retailers in the US. Online shopping on Black Friday is expected to hit $9.6bn in sales, up nearly 6 per cent from last year.
The festive shopping mood was apparent on the ground too, where stores reported heavy foot traffic.
“We’re off to an extremely busy start,” said Lauren Robertson, manager at Camp, a toy store on Columbus Circle in New York, which has discounts of up to 40 per cent for the holiday weekend. She said they had brought in extra staff to handle the demand from customers. “We had a huge uptick in sales on Wednesday . . . and expect that number to continue to climb through Sunday.”
Thanksgiving marked the official start of the Black Friday seasonal sale, or “Cyber Week”, that has expanded — and crept forward — each year, enticing shoppers with heavy discounts in stores and online. Spending on Thanksgiving Day was 5.5 per cent higher this year than in 2022, and has nearly doubled from just $2.9bn in 2017.
Black Friday is one of the busiest days of the year for consumer goods stores, and the period between Thanksgiving and Cyber Monday — the Monday following the holiday, when electronics vendors discount goods — is critical to retailers’ annual revenue.
Despite economic uncertainty, persistent inflation and recession fears hurting consumer sentiment, “ecommerce growth has remained resilient so far due to strong early discounts”, said Vivek Pandya, an analyst at Adobe.
Holiday spending online is up almost 7 per cent so far this season, hitting almost $77bn in the first 23 days of November as sales start earlier, according to Adobe.
Customers often wait until the Black Friday discounts to pick up bigger-ticket items such as televisions and household appliances, which see an average discount in price of around 20 per cent, the research group said. Clothing and accessories are the most popular purchases over the weekend, with retail stalwarts such as J Crew posting 50 per cent off their list prices for apparel. Online sales of toys were up 182 per cent on Thanksgiving Day.
Increased consumer spending over the holiday is being driven by demand, rather than higher prices as a result of sticky inflation, experts said.
More than 182mn people are expected to shop during the Black Friday sales, up 9 per cent from last year, making a record high since tracking began in 2017, according to the National Retail Federation. The industry body projected that total holiday shopping this year will hit a new record, reaching as high as $966bn.
While shoppers are expected to part with record sums over the Thanksgiving holiday weekend, consumer goods prices online at least have fallen for the past 13 months, Adobe found, as retailers respond to economic uncertainty by increasing discounting.
A shift in customer habits has helped accelerate spending, Pandya said, as “more impulse shopping on mobile devices and an uptick in the use of flexible payment methods” makes transactions easier.
This year, more than three-quarters of online spending was done on mobile phones as friends and family gathered for the Thanksgiving holiday, according to Shopify. Buy-now-pay-later schemes were used for almost $500mn in sales on Thanksgiving Day and Adobe predicted these would hit a record of $780mn on Cyber Monday.
Mastercard SpendingPulse reported a more subdued bump in online and in-store sales, citing a 2.5 per cent year-over-year increase, which excluded automobiles. This was on top of double-digit growth experienced in 2022, it said. E-commerce sales were up 8.5 per cent from last year.
The holiday brought brisk trade in other industries, too. The number of passengers passing through US airports in the week before Thanksgiving this year was higher than in 2019, before the pandemic, the Transportation Security Administration said. And sharply falling petrol prices — now at their lowest since mid-2021 — were expected to contribute to a busy day on US highways and forecourts.
But foot traffic was also high, said Robertson at the Camp store in New York, where Christmas music was already blaring through the speakers. “For a toy store, the holiday season — it’s the most exciting time of the year for us.”
