By Garrick Brown, Vice President of Retail Research, Americas
The holiday shopping season seems like it’s over… but it’s actually not.
The continued consumer frenzy for bargain hunting alone has meant that December 26th in the United States has increasingly become a critical day for retailers. Though retail traffic in the States still falls below the traditional Boxing Day crowds in the U.K. and Canada, this year RetailNext forecast that 12/26 would be the fifth busiest shopping day in terms of foot traffic for the 2016 U.S. holiday shopping season. And this is not all about returns either, though Optoro (the returns-focused logistics company that UPS just bought a stake in) reported that U.S. consumers returned about $69 billion worth of goods following last year’s holiday shopping season. Those are fairly daunting numbers, however, it is also critical to note that it is now estimated that gift card sales may account for as much as 25% of all holiday expenditures and that this week is the heaviest week for their redemption. According to Michael Niemara of The Retail Economist, consumers redeem between 15% and 20% of those holiday-purchased gift cards in the week immediately following Christmas.
All of this means that the holiday shopping season continues to evolve and elongate… diminishing the importance of any one given day while still remaining the most critical time of the year for most retailers. And so while the general anecdotal information we have heard has generally supported most forecasts of stronger 2016 holiday sales… we still have another week to go before the season officially closes out. But according to the National Retail Federation, total holiday season sales last year hit $626.1 billion in the United States. Assuming our forecast of 3.7% growth holds, that means that for 2016 we are likely going to see somewhere in the neighborhood of total sales of just under $650 billion. That means roughly $162 billion of gift card sales and, assuming Niemara’s numbers are correct, as much as $32 billion in gift card redemptions in this week alone. Those aren’t numbers to sneeze at… the only problem, of course, is that this is also the time of year when retailer discounts are deepest and their margins most shallow. Still… the holiday sales season marathon is not done yet though the finish line is coming into view.
As the final metrics become available, I will be sharing those with you as well as our analyses of what it means. Also stay tuned for some announcements coming on a few webinars that we will be hosting as we look forward to 2017 in addition to the release of our new Q4 U.S. National Shopping Center Report in a couple of weeks. In the meantime, here are some links to recent reports that you may find useful.
A couple of weeks ago we released our new report, Food Halls of America, as well as our accompanying video for the report, Cool Streets: Food Halls of America Manhattan edition. If you would like to check out that report and video please just click here.
You can watch our webinar Clicks vs. Bricks: Why Cyber Monday is taking over Black Friday by clicking here.
Our Main Streets Across the World Report tracks high street retail around the world and breaks out the globe’s premier shopping districts by continent and average asking rent. It is an invaluable resource and you can access it by clicking here.
And for those of you still trying to figure out what the U.S. Presidential Election really means in terms of the potential impact, our Chief Economist Kevin Thorpe released a report recently on that very topic. If you would like to check out the report, Trump: Impact on the U.S. Economy and the Property Markets, just click here.
By the way, here are a few other links that you might also find useful as well:
For the latest US shopping center statistics you can check out the National Shopping Center MarketBeat for Q3 2016 by clicking here.
You can access the 2016 North American Retailer and Restaurant Expansion Guide by clicking here.
Also, you can check out the Cool Streets of North America Report and accompanying video series by clicking here.
This post is commentary from the latest weekly edition of our Cushman & Wakefield Retail Newsline, which you can subscribe to for free by e-mailing firstname.lastname@example.org.
Garrick serves as Vice President of Retail Research for the Americas. He speaks frequently at industry events and has been a keynote speaker at symposiums, conferences and market forecasting events for groups like the Appraisal Institute, Urban Land Institute, CREW, ICSC and PRSM. He is also a member of Lambda Alpha International, an invitation-only land use society for those who are involved in the ownership, management, regulation and conservation of land, but also those who are involved in its development, redevelopment and preservation.