With another Q4 behind us, we dove into nationwide retail foot traffic data and looked at the performance of key categories to understand how the ongoing economic uncertainty impacted this year’s holiday shopping season.
Holiday Season Continued Driving Retail Visits in 2022
Despite the economic uncertainty and ongoing consumer concerns, the 2022 holiday shopping season once again drove consumers to brick-and-mortar stores. Retail visits began creeping up in early November, although early holiday foot traffic was not as strong as it was in 2021, when pent-up demand and inventory concern drove consumers to visit stores significantly earlier than usual. And like in previous years, retail foot traffic spiked the week of Thanksgiving, indicating that – while the day may have lost some of its pull in recent years – Black Friday still holds a dominant position within the retail calendar.
Still, looking at weekly retail foot traffic for the season as a whole reveals that the real retail peaks of Q4 2022 occurred in the weeks before Christmas, as shoppers stocked up on last-minute gifts ahead of the holiday. This shift towards a later-in-the-season retail visit peak was already observed in 2020 and 2021, and retailers looking to move inventory before the post-holiday sales can take advantage of this opportunity by offering softer discounts to late-season shoppers.
Inflation Casts a Shadow over Holiday Shopping
While looking at 2022’s Q4 retail foot traffic relative to September 2022 showcases the success of this year’s season, zooming out and comparing retail visit levels to 2021 and 2019 highlights the impact of inflation on this year’s retail performance. At the same time, the data also provides some room for optimism.
Although weekly retail visits were particularly weak when compared to last year – when pent-up demand and consumers’ accumulated savings made for an especially strong holiday season – the comparison to 2019 is much more positive. Shifts in consumer behavior pushed some holiday retail visits up to November – which is reflected in the year-over-three-year (Yo3Y) visit increases for the weeks of November 7th and November 14th – and may account for a portion of the visit gaps later in the season.
And even though the week of Black Friday did see a large Yo3Y visit gap of 10.4% – likely due to the decline in the day’s centrality – the Yo3Y visit gaps shrunk to 3.0% the following week and remained below 7.0% for the rest of the season. Yo3Y visits then spiked back up the week of December 19th. Some of the Yo3Y visit growth is due to calendar variations: December 19th - 25th 2022 is being compared to December 23rd - 29th 2019, so a week with six pre-Christmas shopping days is being compared to a week with only 2 pre-Christmas days. Still, the fact that year-over-year (YoY) visit gaps also shrunk that week (despite being compared to the week of December 20th-26th 2021) could indicate that a significant number of consumers on tighter budgets pushed off their holiday shopping to the last minute this year.
So while the mid-holiday season retail foot traffic was weaker than in 2019, the Yo3Y visits were up at the start and end of the season – which could point to consumers' desire to make the most of the first post-COVID holiday season despite the ongoing economic challenges.
Holiday Season 2022 Recap – Category Breakdown
Still, looking at the retail foot traffic performance by category does suggest that inflation had a significant impact on consumers’ spending choices this season. Zooming into key retail categories indicates that while all categories analyzed saw visit gaps relative to the strong 2021 holiday season, categories offering lower price points were less impacted than others. Discount & dollar stores along with superstores saw the smallest YoY decreases in visits, while specialty clothing, recreational & sporting goods retailers, and department stores saw the largest drops. This seems to indicate that consumers looked for stores that would give them the most bang for their buck for 2022’s holiday gifts.
2022 Holiday Season’s Retail Winners
And while the economic uncertainty may have held some retail categories back in 2022, several brands did benefit from consumers’ current value orientation. Visits to Ulta Beauty, which includes both value-priced and luxury products under one roof, were up YoY every single week of the holiday shopping season. Goodwill – one of the largest retailers of second-hand goods in the country – also saw its YoY weekly visits consistently up. Five Below, which prices most of its inventory at under $5, saw visits increase or remain relatively close to 2021 levels. And foot traffic to Ollie’s Bargain Outlet also rose as consumers got closer to Christmas – which suggests that even in the challenging retail environment, there can always be well-positioned brands and segments to rise above the fray.
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