As the holiday shopping season approaches, major retailers are preparing to unveil their holiday outlooks, starting November 18, 2024. Companies such as Walmart Inc., Target Corp., and TJX Cos. are expected to report on their anticipated sales and strategies in light of shifting consumer behaviors and economic conditions [68fcbc46]. Consumer spending, which accounts for two-thirds of the U.S. economy, is projected to grow at its slowest rate since 2018, raising concerns among analysts about the overall health of retail sales this holiday season [68fcbc46].
Target Corp. recently reported a 12% decline in its third-quarter profit, amounting to $854 million. The retailer attributed this drop to muted sales of non-essential items and rising costs, which have been exacerbated by supply chain issues following the International Longshoremen’s Association strike that began on October 1, 2023. This disappointing performance has led to a significant decline in Target's shares [1631bf14].
The National Retail Federation previously predicted a modest 3% to 4% increase in holiday sales for 2024, citing high inflation and rising interest rates as significant factors influencing consumer spending [82e23b71]. Additionally, the calendar presents a challenge this year, with five fewer shopping days between Thanksgiving and Christmas compared to 2023, which could further impact sales [68fcbc46].
Despite these challenges, some analysts remain optimistic. Michael Arone from State Street Global Advisors believes consumers may surprise positively this season, while Mari Shor from Columbia Threadneedle anticipates a good holiday but emphasizes that consumers will be more focused on value [68fcbc46]. Retailers are also grappling with potential impacts from proposed tariffs by former President Trump, which could diminish consumer spending power by an estimated $78 billion annually. Retailers are expected to discuss strategies for mitigating these tariffs during their earnings calls [68fcbc46].
In the lead-up to the holiday season, retailers have already begun early promotions to attract shoppers. Anthropologie opened its Holiday House on September 17, 2024, featuring an expanded holiday experience and QR codes for online purchases, aiming to drive loyalty program adoption among AnthroPerks members [6b6e4940]. Amazon and Walmart have also launched early holiday sales, with Amazon's 'Prime Big Deal Days' starting on October 8 and Walmart's sale running concurrently [6b6e4940].
While Walmart shares have surged 60% in 2024 and retail stocks have risen 8.6% compared to a 23% gain in the S&P 500, the overall sentiment remains cautious as retailers navigate excess inventory and changing consumer preferences [68fcbc46]. The combination of early promotions, economic indicators, and consumer behavior will be critical in shaping the landscape of the 2024 holiday shopping season [82e23b71].