Best Black Friday Ever?
Although there were multiple reports citing high spending and shopping on Black Friday this year, other sources found the opposite. To gain insight into the lack of agreement across different data pools, TSG took a more nuanced look into the specifics of consumer spending across the holiday season. Below are some key observations from our analysis.
- Browsing for deals was up, actual spending may not have been
- Other sources of data in this area reporting out positive findings have not typically adjusted their figures to account for inflation
- Some data sources found a decrease in consumer spending
- Per TSG’s CLIMATE database, consumer spending was down overall, but up in certain regions (Great Lakes), states (Alaska, Michigan, Vermont), and verticals (travel, recreation)
1. Number of Shoppers Does Not Mean Number of Buyers
According to the National Retail Federation, 17% more consumers were shopping onsite over last year, and 2% more were shopping online through Cyber Week. In total, the association reported 196.7 million consumers had shopped over Thanksgiving weekend, extrapolated from data obtained through a survey of over 3,000 consumers. Although these figures were informative and directional, utilizing survey results to estimate larger groups (i.e., surveys of consumers to estimate the U.S. consumer population) requires significant validation in terms of ensuring all key demographic groups are represented at similar levels as the general population – it’s not clear from the public findings whether these groups were appropriately sized. Further, although there were many other anecdotal reports of busier shopping in some parts of the U.S., other reports cite consumers who were very interested in shopping around for deals but did not necessarily purchase products.
2. Many Figures Have Not Been Adjusted for Inflation
Based on internal data, Adobe Analytics reported consumer spending hit record levels in 2022 over Black Friday weekend, with increased spending YoY of 2.3% on Black Friday and 5.8% YoY on Cyber Monday.
Another source that reported high spending on Black Friday was Mastercard’s Spending Pulse, which tracks sales made in-person and online in the retail category on a national scale. Excluding automobile sales, Mastercard reported an increase in retail sales of 10.9% YoY across the weekend, including Thanksgiving through Sunday, November 27th .
Although these figures are of practical utility, notably – neither were adjusted to account for inflation, which has been significant throughout 2022.
3. More Candid Estimates Have Actually Placed Spending Below Last Year
According to estimates from NPD Group, during the week ending with Small Business Saturday (including Thanksgiving, Black Friday, and the following Saturday), revenue produced from sales was down 5% from the same period last year. Data from Bank of America also showed a decrease in holiday spending per household based on credit and debit card data from the end of November to December 3rd. Further, the U.S. Department of Commerce reported that for the full month of November, retail sales fell 0.6%.
4. TSG’s Own Analysis Puts Black Friday Spending Well Below Last Year
TSG’s CLIMATE database (powered through a partnership with Replica) contains data representing credit, debit, and cash transactions through point-of-sale and online channels for over 300 million U.S. consumers. Per CLIMATE, even without accounting for inflation, spending on Black Friday was down year over year from $33.4 billion in 2021 to $32.2 billion in 2022. Overall, YoY spending for the week ending on Black Friday was down 3.67%.
Breaking the data down into just the retail category, spending was still down -5.5% YoY for Black Friday Week, and down -7.8% YoY for Cyber Week. These trends did not change when TSG examined consumer spending on an in-store vs. online basis either, as each demonstrated a decrease in YoY spending regardless for both weeks.
Despite these disappointing numbers, TSG did identify several more positive trends to understand whether spending did increase YoY in any areas. From a more granular analysis of spending data, consumer entertainment and recreation spend was up (+9% YoY) and spending on airlines, hospitality, and car rentals as well (+17% YoY).
Further, some regions of the U.S. experienced greater spending than others. In particular, spending in the Great Lakes region was up 7% YoY, while spending in the Far West region was down 14% YoY.
YOY Change in Overall Retail Spend (-3.7% overall)
Although Black Friday spending was likely not as strong as last year, final shopping figures on consumer spending for the full year have yet to be seen. Further, current spending levels were actually very similar to what they were pre-pandemic, indicating consumers may be in the process of a ‘reset’ when it comes to holiday shopping. Even though overall spending may be down, there are bright spots within certain verticals and regions, as increases in travel/hospitality, as well as recreational spending, provide evidence that consumers are willing to spend but may be more intentional about where they put their funds. Specifically, many consumers focused on traveling to see family and engaging in experiences over gift items. In the future, these may continue to be priorities as consumers are careful with spending.
For more information about TSG’s CLIMATE database, please visit: https://thestrawgroup.com/climate/
Sources: National Retail Federation, Adobe Analytics, TSG’s Climate, Mastercard, Bank of America, NPD Group, CNBC, U.S. Department of Commerce