We’ve just entered the most wonderful week of the year! It’s the week where piles
of sales fliers are shoved in your mailbox with 50% of this, 60% off that and are a 100% pain-in-the-butt to recycle. It’s the week when your email inbox is flooded with more sales ads than friendly correspondence received at any other time of the year. Buy this, shop here, traffic jams galore – it’s the commencement of a new season of unbridled consumerism at the same time people are celebrating and giving thanks for all the blessings in their life. Black Friday really excited me when I was a kid because I would head to the mall with my mom at 8 in the morning and pick through the obliterated shelves at Kaufman’s for unique gifts to give the rest of the family. Nowadays I’m content to sprawl out on the sofa in a turkey-induced coma and watch football. However, I’m not “most Americans” and it’s a certainty that many will be flocking to malls (and their laptops) this week in an effort to save some money.
As hundreds of companies make their giant push at year’s end to turn their sales from the red into the black (hence the term Black Friday), I highly encourage you to partake in their success by owning stock in quality retail names. Despite a troubled economy, consumers will continue to bust out their credit cards, evidenced by numerous sales previews. Retailers have set themselves up for success in the last few quarters and analysts are optimistic for another quarter of record earnings. While many get their seasonal workouts dodging mall shoppers, you can’t ignore Cyber Monday and the ease at which consumers are extending the season online.
My ultimate hope is to shed some optimism on the fact that despite a still troubled economy, retail stocks should post strong sales results this holiday season and their stocks should outperform the broader market.
Thanksgiving Dinner “To Go”
Some of my best memories when I was young happened at Thanksgiving-time: I remember gathering at my grandparents’ house in western Pennsylvania for a huge family feast, and after eating the family grouping back at the dinner table for a game of Scattergories or Trivial Pursuit. These days, it seems like the kids will have to entertain themselves as the ladies in their family head to the malls after dinner and the guys pass out in front of the football game. It’s hard to say if this will become the new norm, but retailers are majorly milking the shopping season for all its worth. It’s undeniable the planning and effort retailers have gone through to make this shopping season a successful one:
According to the National Retail Federation, 135.8 million Americans (or roughly a third of the population) are planning to shop over Thanksgiving weekend and a whopping 183.8 million people plan to shop on Cyber Monday.
Gift cards have been the most-requested holiday gift item in NRF’s survey for nine years running. But for the first time, shoppers say they plan to spend slightly less on gift cards than last year. Those who plan to buy gift cards will spend an average $153.08, down from $172.74 in 2014. Total gift card spending is expected to reach $25.9 billion.
American consumers are wasting no time jumping on holiday offerings from retailers. NRF’s latest consumer spending survey finds that nearly 57% of those celebrating the holidays had already started shopping by early November, up from 54% last year and 49% in 2008.
I also wrote an intense Black Friday piece a few years ago, and you can read it HERE, just keep in mind that the company's editors must have been asleep that day because there are several stupid errors.
Greetings, GradMoney Readers!
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