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Presumably, the result of so many consumers stuck at home surfing the web because of COVID-related restrictions, Christmas holiday spending in the U.S. reportedly increased by 6.8 percent, resulting in a record $756 billion in sales, which perhaps seems counter-intuitive given the ongoing economic challenges facing the country.
It was a merry Christmas for many big-box retailers in particular. And it will come as no surprise that 70 percent of the consumer spending increase was in the online retail space. Sales in the latter sector reportedly increased by 40 to 80 percent.
Principal beneficiaries of this unexpected sales surge given the nation’s COVID-related unemployment rate included Amazon, Costco, Home Depot, Lowes, Target, and Walmart, which constituted 30 percent of U.S. sales, and which experienced a record 18 percent sales growth, according to data compiled by industry consulting firm Customer Growth Partners (CGP). Dick’s Sporting Goods also reportedly did well.
Meanwhile, consumers put vacation travel on hold out of safety concerns which may have freed up some of their cash. Likewise, ticket sales to sporting events and concerts were obviously down, given restricted access or outright cancellations.
Consumers reportedly brought their purchasing power to home-related merchandise, such as appliances, electronics, toys, outdoor furniture, and sports equipment. Clothing sales, aside from sportswear, were down. This is understandable with so many employees working from home — in industries where that is viable — during the pandemic, making business very casual the norm.
“Spending has rotated from spending on services over to goods and this is a substantive shift…Despite many families still struggling, households enjoy $1 trillion more in personal savings, giving them dry powder to spend. It’s turned out to be quite a good holiday even as people are more cautionary in their spending,” explained CGP President Crag Johnson, the New York Post reported.
Dry powder is just a financial buzzword that more or less means cash on hand.
The organization had initially anticipated a 5.8 holiday spending increase. The U.S. census and the National Retail Federation are also due to release their holiday spending findings soon, which may or may not paint a different picture.
“Despite a ‘gray’ Black Friday, a shadow of its former preeminence, and fears of spending softness due to Federal aid delays, shoppers defied the COVID headwinds to generate a most-unlikely jump in holiday sales,” Johnson separately detailed.
While many major retailers are thriving, small business continues to suffer in America unfortunately, given the various restrictions that mostly Democrat governors and mayors have imposed on them. As has been often suggested in this kind of scenario, Wall Street is doing fine, while Main Street continues to languish.
Meanwhile, Congress is still unable to reach agreement on the method for increasing the individual stimulus payment from $600 to $2000.
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