Black Friday Foot Traffic Drops
Predictions of fewer shoppers in retail stores on Black Friday appeared to prove out as many consumers chose to shop online instead of venturing out during record daily increases in coronavirus cases.
Foot traffic to retail stores declined 52.1% on Black Friday compared to last year, according to preliminary data released Saturday by Sensormatic Solutions, the retail analytics arm of heating and cooling company Johnson Controls.
Shoppers camping out at stores to get through doors first for deals didn't happen around the country. Reports instead showed indoor shopping malls with sparse crowds.
“We expect to see some of the in-store traffic that didn’t materialize on Black Friday appear as consumers wrap up their holiday shopping and make last-minute purchases,” Brian Field, senior director of global retail consulting for Sensormatic, said in a statement.
Meanwhile, Adobe Analytics data showed consumers spent $9 billion online on Black Friday, a 21.6% increase over last year, ABC News reported. It was the second-largest online shopping day behind Cyber Monday last year.
Adobe expects this year’s Cyber Monday to top last year with spending between $10.8 billion and $12.7 billion.
Amazon Gives Hundreds of Millions in Bonuses
Online retailer Amazon is doling out $500 million in bonuses to its front-line workers.
Dave Clark, senior vice president for Amazon Worldwide Operations, wrote in a blog post Friday that full-time employees would receive $300 while part-time employees receive half that amount.
In all, the Seattle-based company has invested $750 million in additional pay for front-line workers, Clark wrote. Amazon set its minimum wage at $15 two years ago.
The bonus news comes as thousands of employees were striking on Friday, calling for wage increases. During the pandemic, employees have criticized the company for not doing enough to protect them from the coronavirus while at work.
Amazon has been hiring at a rapid clip during the pandemic as more consumers shifted to online buying. All told, it has added more than 427,000 employees in 10 months. Walmart has hired about half as many in that time.
With the hires, the company has been snapping up real estate around the country and the world for fulfillment and sorting centers. Brian Olsavsky, Amazon’s chief financial officer, said on the company’s third quarter earnings call that it had boosted its logistics capacity by 50% through the first nine months of the year.
Global net sales hit $96.1 billion in the third quarter that ended Sept. 30, 37% higher than the same quarter in 2019. Its sales for the year, 62% of which are in North America, are up 31% to nearly $348 billion.
Amazon forecast fourth quarter sales rising to as much as $121 billion, which would be a 38% gain over last year.
Personal Income Declines
As the holiday season begins, a contradiction has emerged between personal income and consumer spending.
Personal income in October reversed September’s 0.7% gain by falling the same amount. Economists had projected no change in personal income.
Meanwhile, spending increased 0.5%, better than expected but slower than the 1.2% increase in September. Still, spending as increased for six consecutive months.
Spending on durable goods continues to its upward trend of exceeding pre-pandemic levels. Motor vehicles was the only durable goods subcategory to decline from September.
“Other durable goods,” a catch-all that includes luxury jewelry and watches as well as therapeutic equipment, rose to stay well above pre-pandemic levels.
“Welcome to a K-shaped holiday spending season,” Joseph Brusuelas, chief economist for accounting firm RSM US, wrote Twitter on Friday.
Brusuelas noted that luxury, high-end and online sales continue to soar. “That’s the upper path, whereas the lower path likely to be soft,” he wrote.