Holiday sales have risen, but not by much.
During a busy shopping season, many Americans have given up digital point stores. And the pandemic buying trends that favored household goods and food in relation to clothing continued, according to early sales data of companies tracking buyers’ spending.
US retail sales rose 2.4% between November 1 and Christmas Eve, compared to the same period last year, according to Mastercard SpendingPulse, which tracks online and in-store spending with all forms of payment. Online sales increased by 47.2% during that period, the company said. The account excludes sales of gas and cars.
This is below the increase in sales from 3.6% to 5.2% provided by the National Retail Federation, an industrial group, last month. A more complete picture of holiday spending will emerge in the coming weeks as the government reports December retail sales figures and retailers report financial results.
“It will be modest compared to what we’ve seen in the past,” said Rod Sides, head of retail and distribution at Deloitte LLP. Mr Sides said sales were likely to increase by a few percentage points, boosted by retail and online retailers, as an increase in Covid-19 cases in recent months and new restrictions on public meetings have influenced the results. “People who play behind,” he said, “continued to play behind.”
The pandemic produced a holiday shopping season of extreme winners and losers and, in many cases, reduced profits. For traditional retailers, selling online is generally less profitable than selling in stores, as shipping and logistics costs increase.
How will the pandemic affect American retailers? As states across the country struggle to return to business, the WSJ is investigating the evolution of the retail landscape and how consumers could shop in a post-pandemic world. Originally published on November 17.
Among those who did well were large retailers such as Amazon.com Inc.,
Walmart Inc.
and Target Corp., with agile e-commerce operations already in place before the pandemic, and those selling products such as food, household items, holiday decor, and fitness items. Buyers spent more to leave their homes or cook more during the pandemic. Smaller retailers, the most dependent on clothing sales or already struggling financially before the pandemic, have generally weakened this holiday season.
Between October 11 and Christmas Eve, clothing sales fell 19.1 percent, according to Mastercard, even though e-commerce sales for that category rose 15.7 percent. Retail store sales fell 10.2%. Sales of furniture and furnishings increased by 16.2%, and sales of home improvements increased by 14.1%, the company said.
Many shoppers avoided stores, even in the last weeks of the season, when it became harder to order products online in time for Christmas. Between November 1 and December 22, online sales reached $ 171.6 billion, up 32.4% from the same period last year, according to Adobe Analytics. Store traffic on the market has dropped compared to last year throughout the season, even in recent weeks, after many retailers stopped promising that online orders would arrive by Christmas. In the seven days leading up to Christmas Eve, store traffic fell 31.3 percent from last year, according to Sensormatic Solutions, which has cameras and software to track visits to thousands of malls and malls.
Retailers began marketing and holiday promotions in early October this year to reduce store congestion and ease the burden on the e-commerce supply chain. Sales have also risen to cope with the Amazon Prime Day shopping event, which the e-commerce giant moved in October this year. Buyers began spending earlier in response, according to sales data. Retail sales between October 11 and December 24 increased by 3%, according to Mastercard.
Some retailers and brands have still faced shipping heaps due to online crushing.
Some customers who had not received an order from Lego.com earlier this week received a letter from “Santa’s Lego help” to give to the children. “The elves worked as hard as they could, but ran out of supplies,” the letter read. “Since we have to take the pieces to the North Pole, and then the elves have to finish their set, it might take a little longer.”
The non-enemy reason for the delay is the overworked US Postal Service, said Gai Walny, the father of two boys who received the letter from Santa Claus. Mr. Walny ordered Lego themed Minecraft and Star Wars sets. December 1st. Lego moved the order to the postal service system five days later, where it has been since, according to Mr. Walny’s tracking updates on the package.
“We’re actually Jews,” Mr. Walny said. “The children did not receive the letter in any way.” He and his wife bought other Lego sets in stores to give to their children in Hanukkah, said the 39-year-old co-owner of a truck parts company living in Chicago.
To help parents explain possible delays, Lego has sent a similar letter in recent years, a Lego spokeswoman said. The company is informing buyers about delays on its website, she said.
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The postal service is facing performance pressure, similar to other carriers, due to record holiday volume, a spokeswoman said. This is exacerbated by a temporary shortage of employees due to the increase in Covid-19, she said. “We accept all the volume that is presented to us, which adds to our challenges,” she said.
The postal service is under pressure as it manages several discharges from the United Parcel Service Inc.
and FedEx Body.
, which limits the volume of packets it accepts in their systems. After several weeks of rising delays at all three carriers, on-time delivery rates improved in the week of December 13 to December 19, according to ShipMatrix, a software vendor that analyzes shipping data. “Despite such a marked improvement in the last stage, over a million online orders may not be delivered by Christmas, but many of these items are household purchases related to Covid-19 and not holiday gifts.” , said the company.
Retailers’ profits could be successful from growing online, executives and consultants said.
“We see a huge negative trend in profitability,” due to the growth of e-commerce this season, said Sonia Lapinsky, general manager in the retail firm of AlixPartners, a consulting firm. “Those who are doing well this year started investing in e-commerce years ago – Walmarts, Targets – and they had the money to fix it,” she said. “Now the others are just fighting.”
Retailers reduce costs, including reducing the hours available for in-store employees, especially small and medium-sized retailers. “Seasonal traders who engage every fall in the run-up to the holiday season did not take place this year,” said a spokeswoman for Ultimate Kronos Group, which provides workforce programming and human resources technology primarily to small and medium-sized businesses. traditional retailers and other businesses. This year, the number of retail exchanges worked fell by 0.7% between mid-October and the week before Christmas, according to the group. In the week before Christmas, retailers had 12% fewer work shifts than last year.
“There are simply fewer exchanges along the way,” the spokesman said.
Write to Sarah Nassauer at [email protected]
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