Will the Grinch Steal Christmas?

Holiday Sales: A Key Economic Indicator

Sales in November and December account for 20 percent of annual retail sales, but that number can be higher for some retailers. Holiday sales also tend to be more profitable since the increased activity comes without having to boost the fixed costs of doing business.¹

Understanding these trends can help investors anticipate market behavior. Learn more in our US Stock Market Outlook & Strategies for 2026.

In-Store vs. Online Spending Trends

As expected, consumers avoided in-store visits over Thanksgiving weekend, causing spending to drop 22% from last year.²

However, spending looks much stronger when we examine a longer timeframe. Purchases before the Thanksgiving-to-Sunday period surged 66% compared to the previous year, partly because major retailers introduced Black Friday deals as early as mid-October.²

The Rise of Online Shopping

As you might have guessed, the pandemic has led to an acceleration in shopping online. Cyber Monday sales jumped 15 percent over last year’s levels as consumers spent almost $11 billion, making it the largest U.S. online shopping day ever.³

What Holiday Trends Mean for You?

Holiday shopping trends provide important insights into consumer behavior and the economy. If you notice a surprising trend—or one that aligns with your own observations—please give us a call. We’d love to discuss the data and share insights to help you make informed financial decisions.

Frequently Asked Questions:

How does holiday shopping reflect the economy?

Holiday sales provide key insights into consumer confidence and spending behavior. Strong sales often indicate optimism, while weak sales can signal caution or economic slowdown.

When do holiday sales contribute most to annual retail revenue?

Sales in November and December account for about 20% of annual retail revenue, and for some retailers, it can be even higher. This period is crucial for profits without raising fixed costs.

How has online shopping changed during the pandemic?

The pandemic accelerated online shopping. Cyber Monday 2020 set records with $11 billion in sales, making it the largest U.S. online shopping day ever. Many retailers also started Black Friday deals in mid-October.

How did in-store shopping trends change over Thanksgiving weekend?

Consumers avoided stores, leading to a 22% drop in in-store spending compared to the previous year. However, pre-Thanksgiving online purchases increased by 66%, offsetting some of the decline.

What is the difference between in-store and online holiday spending trends?

• In-store spending: Dropped due to pandemic safety concerns.

• Online spending: Surged as consumers shopped early and relied on e-commerce, highlighting a shift in buying behavior.

Why should investors pay attention to holiday shopping trends?

Holiday sales trends can provide early clues about consumer confidence, retail health, and overall economic direction, helping investors make more informed decisions.

How can small changes in consumer behavior impact the market?

Even short-term shifts like earlier Black Friday sales or increased online shopping can affect retailer earnings, stock performance, and economic forecasts.

Are holiday sales trends permanent or seasonal?

Some changes, like increased online shopping, may persist due to convenience. Others, such as post-Thanksgiving surges, are seasonal but indicate shifting consumer habits.

How can consumers take advantage of early holiday deals?

Shop online early, compare deals across retailers, and consider shipping times. Many retailers now offer Black Friday discounts starting in October to spread out demand.

How can I use holiday shopping trends to make financial decisions?

Understanding trends helps with budgeting, investing in retail stocks, or planning personal finances. Observing shifts in consumer behavior can guide both spending and investment choices.