Fun with Data – The Holidays

Fun with Data – The Holidays
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Based on Adobe (ADBE) Analytics, Black Friday sales were $9.1b, up 2.3% y/y, which was up slightly from AA’s expectations of ~$9b (up ~1% y/y), while other sources were looking for a flat to slightly up Black Friday, despite the high inflation scenario this year.  With discounting having started early this year to move excess inventory, other than the one-day door-buster items, discounting seems to be relatively similar to what has already been in place pre-holiday.  Thanksgiving Day on-line sales were $5.3b, up 2.9% y/y, also slightly better than Adobe expectations, according to early data.   While data is not yet in for cyber Monday, Adobe’s expectations are for an increase of 5.1% y/y to $11.2b.
The US Census Bureau provides data concerning the share of annual revenue generated in the 4th quarter of the year for various types of retailers, with 27% of total retail sales occurring in the 4th quarter (2021).  Department stores saw 35.5% of sales in the 4th quarter last year (the highest percentage), while 30.1% of electronics store sales were generated during the same period last year, with sporting goods stores seeing the smallest share (27.6%) of yearly sales in 4Q.

4th Quarter Share of Annual Retail Sales - 2021 - Source: US Census Bureau

Inflation has been the biggest problem for retailers this year, but the seasonal data suggests that November will see a seasonal drop, allowing retailers a chance to make up some lost ground in terms of profitability, which has been difficult to generate this year for many retailers.  That said, on a more specific basis CE retailers have a relatively long way to go in the CE space as based on the census data, we calculate that through October, electronics retailers have seen inflation increase by 9.67% this year[1], as shown in the table below, while computer retailers have seen a 13.44% increase, and while we include office supplies, not a real CE category, to give some perspective, (up 2.16% YTD), appliances are just about flat for the year, down less than a quarter of a percent.  As noted, we would expect November inflation data for the CE space to be down, but based on holiday numbers thus far, it will be difficult for CE retailers to make up ground lost to inflation.


[1] These calculations are based on setting December 2021 as a zero point and calculating the monthly inflation rate for each category of retailers through October.  This data differs from single month (October) data which is calculated on a y/y basis.

5-Year Average Monthly Inflation Seasonality - Source: SCMR LLC, Census Bureau