American retailers are rejoicing this Christmas season, which has been the best in years, as consumer confidence is at it highest since the turn of the century – and shoppers have spent their money at the fastest pace since the Great Recession of 2007.
With the Trump administration tax cuts – which translates into more money in consumers’ wallets – along with unemployment hitting a 17-year low, Christmas shoppers’ attitude toward purchasing, the spending trend can continue well into next year.
Positive proof on the streets
One shopper from Miami, Florida – who started shopping on Thanksgiving weekend by waiting in line on Black Friday at Best Buy to purchase a 65-inch TV – shared the same sentiment toward Christmas spending that many other Americans across the country have expressed this holiday season.
“I feel confident and optimistic about spending this year,” Jorge Nova told AP, according to an AP report published on Newsmax. “I don’t really have a clear budget. It’s been a good year for me.”
Retail experts from around the nation recognize the positive outcome of President Donald Trump’s quest to revive the U.S. economy – after eight lackluster years under former President Barack Obama.
“Shoppers are spending at a pace not seen since the Great Recession, says Craig Johnson, president of retail consulting group Customer Growth Partners,” Newsmax divulged from the AP report. “Jack Kleinhenz, chief economist at the National Retail Federation, predicts retail sales will meet or exceed the trade group’s holiday forecast. That could mark the best performance since 2014. And Tom McGee, CEO of the International Council of Shopping Centers, believes mall traffic and sales were higher than last year, as shoppers bought electronics, clothing and toys.”
According to ShopperTrak, more than 20 percent of the season’s shopping takes place the week before Christmas, and the last-minute boost could drive up the resurgence of Christmas gains for retailers even more.
“I procrastinate ever year,” expressed Rick Daigneault of Warwick, Rhode Island, who began his shopping last Sunday at his local mall, according to AP. “It never fails. Christmas Eve, I’m always at CVS looking for stocking stuffers.”
Post-Obama economic surge
More and more shoppers are coming out of hibernation, indicating that they were wary about the state of the economy during the two terms of the Obama administration.
“First Data, a payment technology firm, puts online sales growth at about double the level at stores,” the AP report informed. “Some analysts have said they expect a large portion of the holiday growth to go toward Amazon, which has been expanding into new areas and putting more kinds of retailers on alert. Amazon had said that Cyber Monday was the biggest shopping day in its history, but didn’t provide figures. Estimates suggest the online behemoth accounted for more than 60 percent of all U.S. online sales that day, compared to just under 40 percent on average for the year to date, according to Bain & Co.”
Even though the increase in online sales has affected foot traffic at large retail stores and shopping malls, the election of Trump appears to have given many retailers the shot in the arm they have needed for years.
“But most department stores, which have been struggling over the past three years, seem to have held their own,” AP noted. “Macy’s Inc. announced in early December it was adding an extra 7,000 holiday temporary workers because of strong traffic. And some specialty clothing chains like Urban Outfitters and American Eagle Outfitters have said that holiday sales have been strong.”
McGee indicated that Trump’s tax cuts could extend the nation’s spending spree well into next year.
“But McGee does expect shoppers will feel comfortable about spending with more money available,” the AP report added.
With 2017 holiday sales hitting $598 million, an enormous retail rebound is hitting the nation from coast to coast, as sales records continue to stack up.
Manuel Rivera is glad to be hitting the stores with more cash in his pocket.
“Our finances are stable and we’re buying more,” Rivera told CBS News.
This sentiment was shared nationwide – from both sides of the counter – with retail sales getting a $33 billion boost under the new Trump administration, when compared to the economy under last year’s Obama administration.
“This is literally the best season since before the recession,” business owner Craig Johnson told CBS News.
Johnson, whose company, Customer Growth Partners, analyzes all retail trends, says the low unemployment rate – along with the booming stock market under the new Trump economy – is driving consumers to their local retailers and online shopping.
“The single biggest drive of retail sales is growth in real disposable income,” Johnson added. “And when real income goes up, people have money in their pocket and they’re able to spend it.”
He said the rising trend can is evidenced across the economy, as shipping companies such as UPS are having to call for more help to accommodate increased online shopping.
“FedEx, UPS and the Postal Service have all been record volumes,” Johnson noted, stressing that every kind of store – from discount, to big box, to full price, to specialty stores – are reaping big gains at the cash register. “All the signs, all the ingredients are in place for a sustained retail rebound here this year.”
And the 2017 sales records show no indication of letting up any time soon.
“Sales of gift cards don’t count until the day they are redeemed, which means this week should also be a boomer for retailers,” CBS News reported.
Other Christmas increases
Other reports show that even though many stores did not survive eight years of the economy under Obama, many more have revived after a strong and steady Trump economy this year, which drove a 5-percent boost.
“Despite thousands of store closings this year, Americans supplied a final flurry of spending to give retailers their best holiday season sales since 2011, figures released Tuesday show,” USA Today reported. “U.S. year-end holiday retail sales rose 4.9 percent compared to the same period last year – a welcome gift to U.S. retailers amid new signs of consumer confidence.”
A new record for dollars spent was set during this holiday period, including an 18.1-percent online retail shopping increase, according to a Mastercard SpendingPulse sales report.
“Overall, this year was a big win for retail,” Mastercard Market Insights Senior Vice President Sarah Quinlan expressed in a statement published in the report, according to USA Today. “The strong U.S. economy was a contributing factor, but we also have to recognize that retailers who tried new strategies to engage holiday shoppers were the beneficiaries of this sales increase.”
The report also indicated that all retailers under every category ended up winners during the Nov. 1 to Dec. 24 shopping period.
“There was no place like home for the holidays for many shoppers, who sent sales of electronics and appliances up 7.5 percent, the strongest growth of the last 10 year,” USA Today’s Kevin McCoy and Zlati Meyer noted. “Sales of home furniture and furnishings separately grew 5.1 percent.”
And the early Christmas sales trend continued deep into the holiday season.
“Shoppers continued spending late into the holiday season, making Dec. 23rd second only to the post-Thanksgiving Black Friday in terms of single-day spending, [with] jewelry sales [rising] 5.9 percent – largely driven by last-minute sales,” McCoy and Meyer continued. “In another sign of the sector’s strength, a public index launched in mid-November to track the performance of traditional U.S. retailers showed a nearly 15.7-percent increase in market returns as of Friday.”
The optimistic numbers revealed on the Solactive-ProShares Bricks and Mortar Retail Store Index reflect more then 75 percent of the retail revenue accrued from in-store sales, which includes companies such as Macy’s; Costco; Best Buy; Home Depot; Tiffany; Target; Dollar General; Barnes & Noble; The Gap; Sears; Nordstrom; AutoZone; and JC Penney.
The predicted sales increase under the new Trump administration is expected to be transcend expectations.
“In October, the National Retail Federation forecasted holiday retail sales to increase between 3.6 percent and 4 percent for a total of $678.75 billion to $682 billion,” McCoy and Meyer informed. “In a Tuesday update, NRF President and CEO Matthew Shay predicted the industry group’s final data due in early January would meet or exceed the forecast.”
STORES Magazine editor Susan Reda indicated that a new invigorated American economy under the Trump administration is no fairy tale.
“Retail is absolutely not dead,” Reda stated in a NRF podcast. “It’s not collapsing, it’s not vanishing, it’s alive and well … in the middle of this transformation.”
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