Retail

Global Economic Uncertainty May Affect Final Lap Of US Holiday Shopping Season

Global Economic Uncertainty May Affect Final Lap Of U.S. Holiday Shopping Season

Even though it’s off to a strong start, troubles in Europe and a global consumer slowdown could adversely affect the final stretch of the holiday shopping season, according to a report by Reuters.

The last shopping Saturday before Christmas is called Super Saturday, and it’s traditionally the biggest shopping day of the season. Retail consulting firm Customer Growth Partners said the day will likely pull in $26 billion in revenue, which is an increase from $24.5 billion last year.

However, British online fashion brand ASOS issued a profit warning on Monday (Dec. 17), sending shockwaves that hit U.S. companies like Amazon, and showing that even successful, online-only sellers were vulnerable to the global environment. That environment includes a U.S. Federal Reserve that’s probably going to raise rates, Chinese consumers acting tepid and European sellers seeing weaker sales. Analysts worry that the skittishness could infect U.S. consumer sentiment.

In fact, FedEx slashed its 2019 profit prediction after Europe’s economic slide and the trade war with China. On Wednesday (Dec. 19), Europe’s largest electronics retailer, CECONOMY, announced that it expected profits to fall. Exacerbating the issue is the looming shadow of Brexit, and the uncertainty of a no-deal departure. Also in the mix are the protests in France.

Despite these issues, there have been some increases on American soil. JCPenny holiday car traffic went up 10 percent from Black Friday through Dec. 10 from a year ago. Target saw a 7 percent increase and Walmart saw a 5 percent pop.

There’s another factor that could help U.S. retailers as well: the low price of gasoline. Data from the American Automobile Association (AAA) showed the national average for gasoline is $2.37, the least expensive since 2016.

“Consumers will definitely notice they have a little more money in their pockets and buy an extra gift or two,” said James Bohnaker, associate director of U.S. macro and consumer economics at financial data company IHS Markit.

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