Holiday sales (Dec 10-Dec 24) staged a strong rally in the two weeks approaching Christmas despite adverse weather across much of the U.S. Importantly, we expect the rate of sales to be better than the traffic shown below as conversion rate and average ticket should be higher YoY (as has been the case throughout 2022, broadly speaking). We’d characterize the season as in-line to slightly above lowered expectations and closely matching our Holiday 2022 & Beyond Outlook. That outlook called for a slower pace in November-December compared to pre-November trends, a bifurcation/hourglass consumption pattern to reappear, and continued strength in BevAlc and cosmetics. Of note, the late December break also implies that e-commerce was not a material participant in the demand surge. Adobe Analytics estimated e-commerce growth of 3.5% for the Nov-Dec period; we suspect that December was the slower month and that e-commerce didn’t gain share, consistent with our outlook.
The table below ranks Dec 10-24 traffic per location by retail segment on a YoY basis. Cosmetics was the standout leader with Sephora ahead of Ulta; versus 2019, Cosmetics was up +17%, also a segment winning rate. This matches our observations at shopping centers during the holiday shopping season where we saw outsized levels of shoppers at the two brands. Uggs also appears to be hot again. Both traffic to the stores and at their retail partners' shelves. We also observed very high activity at shopping center restaurants–people went out!
Dollar Tree, Inc. was a strong performer with its Family Dollar brand leading Everday Dollar Stores and Dollar Tree leading in Dollar Treasure Hunt. Walmart as a company was also a standout given that Sam’s Club led the Club Stores channel and its Walmart essentially matched Target; moreover, Sam’s outperformed the category by 8 percentage points versus 2019. Looking at the other side of the hourglass and versus 2019, High-End Department Stores were up a robust +6% on average, led by Saks (+15%).
Brands that positively surprised include Nike, Foot Locker, and ABC Fine Wine & Spirits. Macy’s Inc. produced segment leading results in both High-End Department Stores with Bloomingdale’s and Mid-Tier Department Stores. Foot Locker outperformed in a strong segment and this is before incoming CEO Mary Dillon makes any of her marks. Versus 2019, Altar’d State led its segment with traffic outperforming by 15 ppts.