It is Thanksgiving weekend in the United States. That also means we are about to step into the Black Friday-Cyber Monday holiday shopping weekend. The weekend saw online shopping numbers shoot up to record levels in 2022. Shopper turnout also rose to a record on Black Friday, according to data from the National Retail Federation (NRF).
Consumer confidence has been eroded in 2023 in the face of economic headwinds and the most aggressive interest rate tightening cycle in roughly two decades. Despite that, analysts for the clothing retail space are expecting a big holiday shopping weekend. Clothing sales rose marginally in the month of October 2023 as the first bout of cold weather improved the sales of items like sweaters and fleeces.
Wall Street expectations have remained low in the current climate. However, TD Cowen analyst John Kernan recently stated that bargain-clothing chains were set to do more business with consumers struggling with high levels of debt. High inventory levels could set the stage for a “promotional” holiday environment, a term retailers use to refer to a climate in which demand forces stores to sell things at cheaper prices.
Target, which saw foot traffic decline last month, has noted accelerated clothing demand in the third quarter of fiscal 2023. Meanwhile, Gap executives also boasted of “improved promotional activity” in recent weeks. “Consumers will benefit from better prices and promotions,” said Matt Pavich, senior director at Revionics, a pricing analytics company. “And also from the rise of private-label offerings to find more value.”
