Record 182M Americans Gear Up for Holiday Shopping

Resilience of U.S. Consumers in the Face of Economic Hurdles

Despite grappling with inflation, rising interest rates, shrinking savings, and the imminent resumption of student loan payments, Americans are demonstrating a remarkable resolve to maintain their shopping habits.

This year, the economic strain seems to be pushing consumers toward seeking out the best deals in the prevailing financial landscape. The National Retail Federation (NRF) forecasts that a record 182 million people plan to shop from Thanksgiving Day through Cyber Monday—an increase of 15.7 million from last year and the highest number since the NRF began tracking these trends in 2017.

The Magnetism of Black Friday Bargains

The appeal of Black Friday discounts remains strong, with about 130.7 million people, or 72% of shoppers, gearing up to search for savings. This marks a slight rise from the 69% who participated in 2022.

These figures highlight the enduring enthusiasm of American consumers, who are expected to spend an average of $875 on a variety of items, ranging from gifts and holiday decor to food and other essentials for the festive season. Retailers are responding to this expected spike in activity by planning to hire between 345,000 and 450,000 seasonal employees, which aligns with the 391,000 seasonal positions filled the previous year.

Retail Sector Investment: A Contrasting Economic Snapshot

The retail sector’s investment landscape offers a nuanced view. On one hand, the S&P 500 Consumer Discretionary Index (SP500-25) has enjoyed a significant 33% rise year-to-date, bolstered by major firms like Amazon (AMZN), Chipotle (CMG), Expedia (EXPE), and Royal Caribbean (RCL). On the other hand, the S&P 500 Consumer Staples Index (SP500-30) presents a contrasting picture with a roughly 5% decline, weighed down by companies such as Conagra Brands (CAG), Dollar General (DG), Tyson Foods (TSN), and Walgreens (WBA).

This split was particularly noticeable last week, when shares of Target (TGT) surged nearly 18% after a strong third-quarter earnings report, while Walmart’s (WMT) stock fell by 8% following cautious commentary about future consumer spending.