Christmas heralds the last stretch of this year's holiday season. The U.S. economy is booming and labor market conditions have improved. Other economic indicators have also largely been on the positive side. The latest in this series is an upward revision of third quarter GDP, which now stands at 5%.
Taken together, these are perfect conditions for holiday shopping. As we head into the last shopping weekend before the year ends, let's examine some of the key factors which will continue to guide purchases.
Season for Retailers
This is usually one of the strongest periods for retailers. Larger players like Target Corp. (TGT – Analyst Report) and Wal-Mart Stores Inc. (WMT –Analyst Report) make the majority of their sales during the holiday season. Additionally, more specialized retailers like Coach, Inc. (COH – Analyst Report) also post higher sales numbers. November and December contribute around 20% of annual retail sales according to the National Retail Federation.
Despite all the hype over Black Friday, Super Saturday on the final weekend before Christmas is more important for the retail sector. This is because consumers have no further time to make important purchases. Consumers made record purchases of $42 billion over the Dec 20-21 weekend, according to Connecticut-based Customer Growth Partners. Last year, consumers spent $41 billion over the same period.
This comes as good news to the retail sector, following disappointing sales over the Black Friday weekend. According to the National Retail Federation, estimated sales declined by 11% compared to the same weekend last year. This is primarily because retailers announced deals earlier than usual this year.
Online Sales Boosts Transportation
According to comScore, $48.3 billion had been spent on online sales in the U.S. during the holiday season as of Dec 23. This sales report measures spending from desktops PCs for the first 51 days during the Nov-Dec 2014 season. This is 15% higher than sales reported during the same period last year. On Dec 20 and 21, sales jumped 36% to $972 million.
