This holiday season is pretty hard to predict. Even though there are a lot of signs that things might not be so hot, people are still spending money. We don’t know what will happen – will people run out of money before or after the holidays? Or will they just keep spending forever? Will they buy things from stores or use their money for trips and experiences?
It’s a big unknown, and that’s why we’re looking closely at any early signs. This week, some signs about the economy were positive, with lower inflation than expected and better retail sales in October.
The Consumer Price Index (CPI) stayed nearly the same, even a bit lower than September, mainly due to lower gas prices and the cost of used cars. It’s at 3.2%, still above the target rate but slowly improving. Analysts are talking more about a “soft landing.”
In other news, your Thanksgiving dinner might cost about 4% less than last year, with turkeys being 16% cheaper. This is a place where prices can go down without causing deflation, giving consumers an immediate benefit. This isn’t just happening in the US – the UK also reported lower inflation in October, driven by lower energy costs.
Retailer Performance
Retail performance was all over the place, with stocks responding more to guidance given than the results themselves. Some retailers, like Burberry, said luxury is slowing significantly, while others, like Macy’s, pointed to their higher-end brands like Bloomingdales and Bluemercury as offsetting a drop in store comps from more midline offerings, like Macy’s itself. Home Depot was lauded for managing through an expected drop in sales, while Walmart was punished because their sales growth wasn’t high enough. These reactions just go to show that the industry continues to be disrupted across the board, though one common theme was a reduction in inventory and focus on lower-price goods to meet the demands of cost-cutting customers.
And then there were the surveys: Data galore!
- WalletHub’s list of Black Friday discounts revealed JCPenney as the top performer, offering an average discount of well over 50%.
- According to an AdvantageOutlook survey, 48% of retailers and manufacturers anticipate a 1-5% growth in unit volume this holiday season, driven by consumer demand and improved product availability. This contrasts with many retailers mentioning lower inventory compared to the previous year.
- Retailers are catering to specific customer needs by finding niches, as seen in Walmart’s introduction of store hours designed for people with sensory sensitivities.
- MediaMarkt, a German electronics retailer, shared insights on how they leveraged local online advertising inventory to achieve a 9% increase in overall sales in the headphones category and an impressive 78% increase in offline sales. Such detailed information on online-to-offline impacts is noteworthy.
- A study by Scams.info reported that over a third of Amazon book reviews are fake, while categories like Pet Supplies and Toys are considered more trustworthy, with fake review percentages ranging from 7-18%.
Nikki Baird, Forbes.com
