Now that Election Tuesday is over, retailers are counting on Americans turning their attention to Black Friday.
The National Retail Federation projects that about 137.4 million consumers will make purchases in stores or online over the four-day weekend that started on Thanksgiving, marking the kickoff to the holiday shopping season. The amount Americans have spent has declined in the last three years, slipping 26 percent from 2013 to an average of $299.60 per person last year, according to the trade group.
By most accounts, this holiday season is expected be a boon for retailers. Unemployment, gasoline prices and inflation are low, while wages, home values and the stock market continue to rise. Shoppers have the wherewithal to spend, and now retailers are hoping the holiday season will give them a reason to. Companies such as Kohl’s Corp., Gap Inc. and Barnes & Noble Inc. have said the U.S. presidential election was a major cause of consumers’ recent reluctance to open their wallets. With the outcome settled, they’re expecting the dollars to finally flow.
“We’ve had some, we believe, pent-up demand – just based on the economics of our consumer,” J.C. Penney Co. Chief Executive Officer Marvin Ellison said in an interview this month. “We’re anticipating we’ll see pent-up demand released, and it being post-election will only help that.”
U.S. retail spending is expected to rise 3.6 percent to $655.8 billion in November and December, the Washington-based NRF estimates. Retailers are poised to take full advantage of the Thanksgiving holiday period, now known by some as Black Week, which accounts for about 15 percent of holiday spending, according to the trade group.
J.C. Penney will open its doors at 3 p.m. on Thursday to reach shoppers before they tuck into their Thanksgiving feasts. EBay Inc. is trying to push the selling even earlier: It rebranded the day before Thanksgiving as Mobile Wednesday, using discounts to target traveling Americans. The sales will stretch through the weekend, with online and brick-and-mortar companies offering deals for Cyber Monday.
Investors are confident that the retail industry will see strong sales. The Standard & Poor’s 500 Retail Index has risen 4.9 percent so far in November and is on pace for its best monthly return since July. Retail stocks have outpaced the broader market since the U.S. presidential election, with the index up 4.7 percent since Nov. 8, compared with the broader S&P 500’s 3 percent rally. Historical studies indicate that elections affect the timing of retail sales rather than the overall volume, said Jerry Storch, CEO of Saks Fifth Avenue owner Hudson’s Bay Co.
“Hopefully, when we get to Black Friday, which really tolls the bell of holiday shopping, then the consumer will start looking forward to Christmas,” Storch said.
That would be a welcome development for merchants that have yet to see a sales bump materialize. Dollar sales in the second week of November were 8 percent lower than in the same period a year earlier, according to research firm NPD Group. The decline was broad-based, too, with drops in apparel, toys, technology, athletic footwear and perfumes, the firm said.
For shoppers who are ready to spend, they have more ways than ever to do so, with retailers including Wal-Mart Stores Inc. and Amazon.com Inc. offering exclusive deals to customers who download their mobile applications. Non-store sales may increase 7 percent to 10 percent this year, reaching as much as $117 billion, according to the NRF. Online sales account for the bulk of this measure, the group said.
“If Amazon had … everything you need in the world, I would buy everything from there,” said Oscar Viral, a 58-year-old chef in New York.