By Juveria Tabassum and Arriana McLymore
(Reuters) – Retailers are in for a mixed holiday season this year ahead of Black Friday and Christmas, marked by watchful consumers keeping big spending on a tight leash and vigilantly comparing prices on their mobile phones to look for the best deals on apparel, electronics and toys.
Against this backdrop, bellwether Walmart lifted annual sales and profit targets this week, and said a majority of its customers were maintaining holiday plans year over year in the midst of an election year.
Walmart has managed to gain market share as its ultra-low prices on groceries and a wide range of discretionary goods attract upper-income households to its superstores.
On the other hand, rival Target’s forecasts for the holiday quarter were significantly subdued, with executives saying demand remains weak for higher-margin items such as home goods and electronics.
Despite a rate cut from the U.S. Federal Reserve, the first in four years, consumer spending on non-essential items has remained uninspiring, and industry analysts expect a deal-heavy holiday shopping season yet again.
Overall holiday shopping is expected to grow at its slowest pace in six years, according to separate reports from the National Retail Federation and Deloitte.
This year, there are just 26 days between Black Friday — which has traditionally marked the beginning of the holiday shopping period, and Christmas, compared with 31 days last year.
“The fourth quarter will be fun to watch. And the calendar is not our favorite with fewer days between Thanksgiving and Christmas. And I suspect when all that’s said and done, it will be similar to the kind of momentum that we’ve seen in the first three quarters,” said Walmart CEO Doug McMillon on a post-earnings call on Tuesday.
The shorter calendar prompted retailers to try and pull forward some demand earlier in the year, offering heavier discounts as early as July, around the back-to-school shopping season.
Gen-Z consumers, more comfortable shopping on phones, are driving a shift towards mobile spending, and are likely to influence families to do the same over the holidays, said Minkyung Kim, Assistant Professor of Marketing at Carnegie Mellon University’s Tepper School of Business.
SHIFT TO MOBILE PHONES
Mobile phones are expected to account for 53% share of online spending from November through December, reaching a total of about $128.1 billion, according to a forecast from Adobe Analytics which measures online consumer transactions from 5,000 shoppers.