The holiday shopping season got off to a solid start over the weekend, as online Black Friday sales beat expectations and started to build some much-needed momentum for the retail sector. According to Adobe’s online sales tracker, consumers made a record $9.12 billion in online purchases on Black Friday. This is 2.3% higher than the previous year and higher than the expectation of 1% growth. But that is only one piece of the puzzle. In another Early Look report, traffic at brick-and-mortar retail stores on Black Friday rose nearly 3% in 2021, according to retail tracker Sensormatic, which it attributed to increased promotional activity and “friendly in-store experiences.” While inflation has squeezed consumers this year, more than 166 million people plan to shop from Thanksgiving Day through Cyber Monday, according to the National Retail Federation’s annual survey. This is 8 million more than the previous year and the highest estimate since 2017. Final NRF numbers are due out on Tuesday. KeyBanc cited the Sensormatic data in a research note on Sunday – adding that if accurate, the numbers would be higher than its analysts expected. In a recent channel investigation, KeyBanc observes that traffic at physical retailers was “flat bottom” year over year. Analysts say this year’s holiday shopping calendar is one day longer than 2021. Many struggling retailers benefited from this strong start to holiday shopping. Goldman Sachs said retailers such as Target (TGT) and Bed Bath & Beyond (BBBY) attracted more consumers by offering deep discounts on products. In a separate note, Deutsche Bank noted “strong demand for beauty” at retailers such as Ulta Beauty (ULTA), Kohl’s (KSS), Victoria’s Secret (VSCO) and Bath & Body Works (BBWI). Apparel retail traffic was also solid. Deutsche Bank analysts said American Eagle Outfitters (AEO) was a leader among teens. Other standout performers included Gap (GPS) with its Old Navy brand as well as Abercrombie & Fitch (ANF) and its Hollister brand. The Bottom Line As with holiday shopping, we continue to love off-price retailers during this difficult time. We are most bullish on Club Holding TJX Companies (TJX), which operates TJ Maxx, HomeGoods and Marshalls. Major full-price retailers are dealing with inventory gluts, serving as a bumper crop of cheap merchandise that discounters like TJX, Ross Stores (ROST) and Burlington Stores (BURL) can spin for a nice profit, But also a good deal at the same time. Customer. Meanwhile, many big box retailers are still working through inventory gluts. They ordered a lot this year, expecting a repeat of the pandemic shopping spree during 2020 and 2021. Bad news for those stores has been good news for TJX, which has outperformed the broader market this year. We look forward to more strong performance. (Jim Cramer’s charitable trust is long TJX. See here for a full list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll receive trade alerts before Jim trades. Jim waits 45 minutes to send a trade alert before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. The above Investment Club information is subject to our terms and conditions and privacy policy, along with our disclaimer. No fiduciary obligation or duty exists, or is created, by virtue of your receipt of any information provided in connection with Investment Club. No specific results or benefits are guaranteed.
Customers queue at the cashier area at a Macy’s store during the Black Friday sale on November 25, 2022 in Jersey City, New Jersey.
Kenna Bettencourt | Getty Images
The holiday shopping season got off to a solid start over the weekend, as online Black Friday sales beat expectations and started to build some much-needed momentum for the retail sector.