America’s Confident Consumers Post Record Breaking Holiday Spending
$AMZN, $M, $MA, $TGT, $FDX, $UPS
The US Holiday shopping season is on track to break sales records on the back of rising consumer confidence presenting an unexpected “boom” for retailers and the delivery companies they rely on.
The Christmas Holiday shopping season, a Key period for retailers that can account for up to 40% of annual sales, brought record-breaking online and in-store spending this year of more than $800-B, according to MasterCard Inc.’s (NYSE:MA) analytics arm.
Stakes are particularly high this year for traditional retailers that have invested heavily in technology and free delivery and returns, determined to stay relevant in a market increasingly dominated by Amazon.com Inc.(NASDAQ:AMZN)
“It has been an extremely positive holiday season in terms of sales both for brick-and-mortar and for online businesses,” said a Retail Fellow at analytics firm RetailNext.
Preliminary numbers show total holiday sales will exceed RetailNext’s initial forecast of a 3.8% increase from last year. “All the economic indicators were very strong, and so I think consumers were more willing to open up their wallets and purses and spend more,” Kohan added.
RetailNext and most other analytics firms and industry groups – including Adobe Analytics and the National Retail Federation (NRF) are due to publish Holiday sales data in January.
MasterCard Inc. said on Tuesday that a late-season rally had driven an 18.1 percent rise in online sales. Department store chain Macy’s Inc. (NYSE:M) and Target Corp. (NYSE:TGT) both noted increased activity during that time.
A Target spokesman told Reuters that during the week before Christmas the company had seen a marked increase in shoppers picking up online orders in stores, while a Macy’s spokeswoman said last-minute shoppers boosted fragrance sales during that frame.
Package delivery companies that handle returns for retailers have benefited from booming delivery volumes in recent years, but also have had to invest billions of dollars to upgrade and expand their networks to cope as e-Commerce purchases surge to new heights.
FedEx Corp. (NYSE:FDX) said it experienced another record-breaking peak shipping season, but declined to provide specifics. The company’s Chief Marketing Officer told analysts last week about 15% of all goods purchased online are returned, with apparel running at about 30%.
UPS (NYSE:UPS) has worked for years to increase its ability to forecast customer shipping demands to handle major package volume spikes ahead of the holidays. It has also raised shipping rates and added 2018 peak-season surcharges.
UPS and FedEx shares both ended up a bit Wednesday.
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