US retail sales unexpectedly rose in November, signaling consumer resilience and alleviating fears of a recession. The increase in sales, driven by deep discounting and lower gasoline prices, suggests that the economy will continue on a moderate growth path this quarter. The strong labor market and higher consumer spending also cast doubts on expectations for a rate cut by the Federal Reserve. Economists now predict that fourth-quarter consumer spending could grow by as much as a 2.75% annualized rate, contributing to GDP growth. The economy remains supported by a robust labor market, with low layoffs and steady job creation.
US Thanksgiving weekend sales reached a record high as shoppers took advantage of deep discounts and online deals, spending approximately $38 billion online. Online consumer spending during Cyber Week increased by 7.8%, surpassing initial expectations. Despite concerns about cautious consumer spending due to inflation, blockbuster deals attracted more than 200 million shoppers, both in-store and online. The number of online shoppers rose by 3.1%, compensating for a slight decline in brick-and-mortar store visitors. Consumers spent an average of $321.41 on holiday-related purchases, with discounts peaking at 31% for electronics and 27% for toys on Cyber Monday. Buy Now, Pay Later (BNPL) services also saw a surge in usage, with a record $940 million worth of purchases made through BNPL on Cyber Monday.
U.S. cities and retailers are increasing security measures as concerns over crime grow among potential shoppers. In response to recent thefts and robberies, cities like San Francisco and Sweetwater, Florida are implementing initiatives to enhance police presence and ease public fears. A Gallup poll shows that more Americans fear becoming victims of crime, with high percentages expressing concerns about walking alone at night and car theft. Law enforcement agencies are conducting raids and arrests to combat organized shoplifting rings, while cities like Beverly Hills are utilizing police drones and surveillance cameras to monitor and deter criminal activity. Retailers are also experimenting with new store layouts to reduce blind spots and deter shoplifters. The National Retail Federation estimates that U.S. retailers lost a record $112 billion in stolen merchandise in 2022.
The Roseville Police Department is investigating two armed robberies that occurred at the Westfield Galleria mall parking lot, targeting victims with high-value items. As the holiday shopping season begins, the police are urging shoppers to be vigilant and report any suspicious activity. The department is increasing police presence and enforcement efforts in and around the mall to ensure a secure shopping environment. Shoppers are advised to avoid displaying high-value items and report any suspicious activity to mall security or the police.
Best Buy, the top U.S. electronics retailer, has forecasted a larger decline in annual comparable sales and cited "difficult to predict" consumer demand ahead of the holiday shopping season. The company's shares fell 5% as it reported an eighth consecutive quarterly fall in comparable sales. Factors such as elevated interest rates, a shift to spending on services, and the resumption of student loan repayments have contributed to weakened appetite for electronics and home-office products. Best Buy's third-quarter revenue dropped 8.2% to $9 billion, with demand falling across various product categories. The company has adjusted its annual sales forecast to a decline of 6.0% to 7.5%.
Major retailers like Amazon, Walmart, Target, and Best Buy are starting their holiday sales events earlier this year as consumers adjust their holiday shopping timetables. Despite high prices, record credit card balances, and the resumption of student loan payments, retailers are trying to entice shoppers with early promotions and discounts. While experts offer mixed messages about consumer spending this holiday season, many consumers view gift-giving as a necessity and are willing to shop earlier or seek out deals. Marketers are also planning to spend more on advertising, particularly through targeted online ads and social media. The start of the holiday shopping season has been gradually moving earlier, with Amazon's Prime Day and other early promotions setting the trend. Consumers are increasingly shopping online, with buy now, pay later services expected to see growth. Overall, consumers have come to expect sales and promotions, and they are unlikely to make purchases without some form of discount.
