Black Friday started early this year as retailers spread out their deals online and in stores days ahead of the traditional shopping event. Some would argue that Amazon’s (AMZN) prime event in October was the unofficial kick-off to the holiday season this year.
Overall U.S Consumers are expected to spend about $148.5 billion on Black Friday and Cyber Monday, according to a survey from Finder. Furniture items are expected to be top sellers, followed by major appliances and electronics.
The big winner this year will be online shopping. Brick-and-mortar stores are expected to be the losers as COVID-19 cases rise across the U.S.
A recent survey by the National Federation of Retailers shows consumers are cautious about in-store shopping over the weekend with most saying they’re unlikely to visit stores. Only 12% of consumers surveyed by Morning Consult expect to shop in-store this Black Friday.
This year most big name retailers announced they will be closed on Thanksgiving Day to prevent big crowds. Digital purchases will be the primary driver of growth this year with 96% of retailers expecting more online-only holiday sales, according to the NFR.
Big retailers like Target (TGT), Walmart (WMT), Best Buy (BBY), Home Depot’s (HD), Lowe’s (LOW), Macy’s (M) and JCPenney (JCP), Kohl’s (KSS) and Dick’s Sporting Goods (DKS) have spread out Black Friday promotions across days and even weeks.
“Rather than concentrating holiday deals around Thanksgiving and Black Friday, we’ve spread our Black Friday offers throughout the entire month of November with weekly promotions spread across different categories throughout the month,” Target CEO Brian Cornell said during the company’s third-quarter earnings call last week.
Discounts are most concentrated in apparel & accessories, computers and phones, appliances and electronics, according to Wallethub. The following are some of the average percentage discount by retailer for this Black Friday season:
Nordstrom (JWN): 39.0%
GameStop (GME): 38.8%
Best Buy: 25.3%
Overstock.com (OSTK): 22.7%
Sam’s Club: 22.6%
Costco (COST): 22%
Retailers are closely monitoring their performance during the month of November. Dick’s Sporting Goods CEO Edward Stack noted a strong start to the holiday quarter in its latest quarterly announcement on Tuesday.
“Overall, the favorable trends in our business have continued into Q4 ... Through the first three weeks of Q4, our consolidated comp sales have increased in the high-teens,” said Stack.
The National Retail Federation today forecast that overall holiday sales during November and December will increase between 3.6% and 5.2% over 2019 to a total between $755.3 billion and $766.7 billion.
The numbers, which exclude automobile dealers, gasoline stations and restaurants, compare with a 4 percent increase to $729.1 billion last year and an average holiday sales increase of 3.5 percent over the past five years.
“We think there’s going to be a psychological factor that they owe it to themselves and their families to have a better-than-normal holiday,” said NRF Chief Economist Jack Kleinhenz. “There are risks to the economy if the virus continues to spread, but as long as consumers remain confident and upbeat, they will spend for the holiday season.”