Greetings friends,
I’m writing this post on the Monday following the US Thanksgiving holiday, coming back to work after a turkey-fueled, family-filled long weekend. I’ve made it to day four of leftovers, which if I’m honest will be the last day of leftovers. It feels wasteful to spend all that time and effort to prepare the holiday meal without getting an adequate ROI by enjoying the food in the days following, but after several sandwiches, pot pies, and re-heated plates I’ve found my limit.
Thanksgiving kicks off the holiday season in our family. Instead of hunting for bargains on Black Friday we’re usually decorating the house and watching holiday movies. These activities collided for me this year, however, when we found that the lights on our Christmas tree of over a decade had died; a Black Friday deal was found and the next day we were picking up a brand new, larger tree.
I’m pleased my tree purchase could contribute to the strong start to the US holiday shopping season that kicked off last week. Retail sales on Black Friday alone were up 2.2% vs. last year, according to Mastercard, with online sales leading the way. $5.6B was spent online in the US on Thanksgiving and another $9.8B on Black Friday, a new record and further 7.5% increase over last year. The jury is still out on Cyber Monday, but based on last week’s results I think we can expect a strong showing.
Consumer spending has been defying the odds throughout 2023, especially in the United States. While recession fears have loomed, spending by consumers, particularly on services, has boosted many companies in the travel and leisure industries. There is broad speculation that last week’s strong retail data is less an indication of strong demand and more a result of many customers spending strategically.
There are significant deals that are offered on these few, particular shopping days and perhaps this is a ‘last hurrah’ of spending before the belts inevitably tighten. This past summer may have been the season of YOLO travel, however there are signs that consumers are starting to feel the pressure of high interest rates, increasing debt, and reducing savings.
While other OECD economies are seeing lower or negative economic growth, they also tend to have a more pessimistic consumer who is traditionally more adept at saving than their optimistic US counterparts. Perhaps they just started to pull back on spending earlier? This year we’ve seen spending on services grow at a much faster pace than on consumer or household goods. Perhaps this trend reverts to the norm in 2024? As a supplier of components for consumer packaging, I certainly hope so. We’ll find out together in the New Year.
It's a lovely time of year to share blessings with those you love, as well as with those that can use it most. Please visit Giving Tuesday to connect with charities in your country or community.
Happy spending (and giving),
-Simon
Read more print and packaging insights from our Head of Global Marketing, Resins for Paper, Simon Foster.