Retail: What to know about US consumer this holiday season
The holiday shopping season's marquee event is finally here: Black Friday. Retailers begin their promotions earlier and earlier every year, with stores pushing discounts as early as October in 2023. Jones Lang LaSalle Incorporated (JLL) President of Retail Naveen Jaggi joins Yahoo Finance Live to talk retail sales data and the strength of the US consumer.
The US consumer is as resilient as ever, and they have proven time and time again, they will spend when given the opportunity to spend, and no better example than when we came out of the pandemic... when we saw the whiplash at a mass of 60-70% year-over-year in holiday sales from 2020 to 2021," Jaggi says. "Look for the US consumer to surprise us this holiday season, I predict between 5 and 6% above last year's trends."
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Video Transcript
- Great to see you, Naveen. Help us break down what you're seeing from your perspective here and the expectations going into this holiday shopping season versus years past?
NAVEEN JAGGI: Oh, good morning. Pleasure to be here. I think the first thing we can note the holiday season for most retailers began in October, not Black Friday. I think Black Friday is the official kickoff period. But retailers started promoting quite heavily into mid-October.
The reason why is because they were trying to capture that dollar by the US consumer, which we noticed was pulling back a bit over the past two months. So how do you get their attention? By making those promotions start quite earlier. To me, that's a good sign.
Now as much as we keep talking about sales turning negative and consumer sentiment moving southward, here's what I will say. The US consumer is as resilient as ever. And they proved time and time again that they will spend when they've been given the opportunity to spend. And no better example than when we came out of the pandemic in '20.
And we saw the whiplash at a massive 16% to 17% year over year in holiday sales from '20 to '21 to show. We look for the US consumer to surprise us this holiday season. I predict between 5% and 6% above last year trend.
- Naveen, what are you seeing at JLL just in terms of leasing activity from retailers and how some of their strategy maybe has shifted or adjusted as a result of what you were just saying in terms of what consumers are spending on and some of the changes that we saw take place during the pandemic?
NAVEEN JAGGI: Well, I think what we're seeing, first of all, is leasing volume, broadly speaking, nationally is down about 12%. Now where is that reflected? Well, that's reflected in your standard soft goods and your big box retailers not selling as many leases for '24 as it did in '23 and '22.
However, what we are seeing is a continued shift of spend away from our items, products, furniture, electronics, and experiences. And we've read about the Taylor Swift impact in those markets. We've heard about Beyonce and U2 and others.
People are traveling more as the airline industry stocks will show. So I think right now more than anything else, we're starting to see US consumers over the last 12 months move to more experiential retail spend, which isn't unexpected after being shut down and locked down for coming on 18 to 24 months, depending where you live.
