As I wrote in Payne’s Perspective, in Friday’s session, early reports of light mall traffic sparked selling in retail, especially brick-and-mortar names. There are a few things to remember. While there is a societal shift toward online shopping, there will still be big brick-and-mortar winners. Moreover, what I observed during my field trips (my granddaughter volunteered to help) is there were lots of Gen Z kids in the mall shopping, using it as a backdrop for socializing, much like the historical role of malls.
Meanwhile, the online surge saw $4.2 billion in sales on Thanksgiving, and $7.4 billion on Black Friday (both were records, and they were $200.0 million below estimates as well).
According to Bain & Company, Amazon (AMZN) will capture 42% of all online sales, underscoring the need to have that as a cornerstone position in everyone’s portfolio.
When it comes to this holiday shopping season, it’s important to remember that there are six fewer shopping days, which means the bargains have been out there for weeks (Black Friday sales were advertised all November).
Holiday Shopping | Thanksgiving | Black Friday |
Brick & Mortar | +2.3% | -6.2% |
Online | +14.5% | +19.6% |
Adobe & Shopper Trak
There was one silver lining for brick-and-mortar stores, and that was same-store conversations or an uptick in folks that bought when they visited stores, according to RetailNext:
Traffic -2.1%
Transaction value -6.7%
Conversations +1.7%
Total same-store sales -1.6%
There was also a 43% increase in Buy Online, Pick Up in Store (BOPIS), suggesting omnichannel will produce a lot of brick-and-mortar winners.
Cyber Monday
There is a lot of hype coming today, which marks the official crossing over for shoppers to online shopping from offline shopping.
- Estimate $9.4 billion +20% from one year ago
This year, online shopping began to pull away from general merchandise. November retail sales report:
- Internet: +14.3% $610,796,000,000
- General Merchandise: +0.9% $569,285,000,000
- Building Materials: -2.0% $320,473,000,000
- Clothing Stores: -2.7% 208,870,000,000
- Furniture Stores: +0.9% $95,238,000,000
Eight of the ten busiest shopping days are upon us, so there will be a lot of daily money-counting and teeth-gnashing.
Portfolio Approach
Today’s Session
The futures are pointing to a higher opening, although off the early morning highs. News is out that President Trump will restore the tariffs on Brazil and Argentina metal imports. Earlier he tweeted, “Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel.”
All eyes will be on the ISM number and construction spending.
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