With the movement to shop online going on unabated, foot traffic to U.S. stores during Thanksgiving and Black Friday declined year over year.
The Wall Street Journal, citing data from RetailNext, reported traffic during the two days in U.S. stores dipped between 5 percent and 9 percent compared with Thanksgiving and Black Friday a year ago. Meanwhile, the paper reported that ShopperTrak found store traffic declined 1 percent compared to last year. The decline was attributed to a continued shift to make online purchases, with many stores putting their best deals online. Internet sales for Wednesday through Black Friday increased 26.4 percent year over year to $12.3 billion, reported the Wall Street Journal, citing data from Adobe Systems which tracks the sales across thousands of websites.
The paper noted that lower-income families in the U.S. are feeling like they have more cash to spend thanks to lower gas prices and rising hourly wages, which will benefit Walmart and owners of lower-end stores. In an interview with the Wall Street Journal, Walmart U.S. CEO Greg Foran said it’s lower-income shoppers who are feeling more confident. “As you go through each of those, I think that you’ve got to say that for most people we serve in America it’s OK,” he told the Wall Street Journal.
The report noted that during the past year low-income workers saw wages increase after years of being left out of the economic recovery, with pay in the retail sector rising 3.8 percent during the second quarter. That was higher than the 3 percent increase seen for professional services workers. Extra hourly wages can alter a low and middle-income household substantially, enabling them to spend more during the holidays. That means some of the retail sales gains could show up later in the season since some shoppers were working during the Black Friday shopping weekend. “It should be a banner Christmas for lower-income households, and the increase in their spending this holiday season should outpace the growth in spending by middle and higher income households,” noted Mark Zandi, chief economist for Moody's Analytics, in the report.