LOS ANGELES ̶ Nov. 18, 2013 ̶ For the fourth year in a row, disposable incomes have only inched up, wearing on consumers’ ability to shop ‘til they drop. October’s government shutdown also played a role in weakening spending; consumers lost some of their recovered confidence about the domestic economic outlook and tightened their purse strings. On the back of these lackluster trends, IBISWorld forecasts Thanksgiving and holiday gift spending to be weak this year. Revenue generated by the Thanksgiving holiday is expected to increase only slightly from 2012. While Cyber Monday sales are anticipated to increase strongly by double-digits in 2013, this growth rate is deceptive, as it is mainly due to consumers’ continued shift away from physical store shopping and toward online deals. Overall gift spending from Black Friday through Cyber Monday is only expected to grow 2.2 percent year-over-year.
Compared with last year, Thanksgiving spending is anticipated to grow 3.7 percent to $8.2 billion. More than two-thirds of this figure comes from spending on food and drink for family gatherings and festivities; this category is expected to increase 5.1 percent from 2012. Celebrating the year-end holidays with loved ones remains an important tradition for many Americans, so spending on consumables is not expected to suffer much, despite poor confidence.
Families and relatives are expected to gather around the turkey this year, with 87.8 percent of US households expected to celebrate T-day. The average household will spend $52.75 on Thanksgiving dinner and $31.23 on turkey alone. Other, more discretionary expenses such as greeting cards, gifts and decorations are not anticipated to grow much this year, increasing only 0.7 percent over 2012 figures. Consumers are more likely to dedicate their cash to food and drinks.
|Food and drink ($m)||$4,741.8||$4,530.9||$4,746.6||$5,046.1||$5,393.5||$5,666.5|
|Other expenses ($m)||$2,442.7||$2,333.3||$2,289.1||$2,384.3||$2,497.9||$2,557.5|
|% annual change||-4.5%||3.2%||5.6%||6.1%||3.7%|
All dollar figures are in constant 2013 dollars
With tight budgets expected this holiday season, Black Friday and Cyber Monday spending increases are projected to be smaller than those of 2012. This year, Black Friday is projected to generate $13.6 billion in revenue, an increase of 3.9 percent over last year’s total. The smaller increase is due to the continued sluggish growth in disposable incomes and relentless high unemployment. Still, growth in Black Friday revenue will be driven largely by door-buster deals and online sales that start at midnight. With bellies full of turkey, consumers are likely to jump on these online promotions; others will opt to walk the food off at retail locations, vying to score a great deal.
Spending during the Black Friday weekend (which includes Friday, Saturday and Sunday) is anticipated to grow just 1.7 percent to $38.7 billion. The bulk of weekend purchases (35.2 percent) is expected to be made on Black Friday itself, owing to enticing sales and the spirit of the day itself.
Cyber Monday, while still only about 15.0 percent the size of Black Friday in terms of revenue, is forecast to record double-digit growth of 13.1 percent. The $1.8 billion shopping day has increasingly made its way to the top of shoppers’ preferences for its plethora of online deals and free shipping promotions. This year will be no exception, as Cyber Monday outpaces growth during the remainder of the holiday shopping weekend.
Black Friday and Cyber Monday Sales
|Black Friday ($m)||$12,043.9||$12,042.6||$12,348.2||$12,382.4||$13,113.3||$13,618.5|
|% annual change||0.0%||2.5%||0.3%||5.9%||3.9%|
|Black Friday weekend ($m)||$32,273.7||$32,184.6||$33,891.2||$34,637.1||$38,034.8||$38,688.3|
|% annual change||-0.3%||5.3%||2.2%||9.8%||1.7%|
|Cyber Monday ($m)||$914.4||$949.1||$1,080.5||$1,293.8||$1,565.8||$1,770.7|
|% annual change||3.8%||13.9%||19.7%||21.0%||13.1%|
About IBISWorld Inc.
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