As iconic U.S.-based department store Macy’s (NYSE:M) gets set to release its third-quarter of 2018 earnings results, the global retail sector has been preparing for year-end holiday sales.
Consumers generally continue to take out their wallets, despite the myriad of event risks looming in the background, including trade-related tensions, Brexit negotiations, as well as the impact on the cost of crude from U.S.-imposed sanctions on Iranian oil supplies.
Indeed, personal consumption expenditures (PCE) have shown consistent strength throughout Q2’18-Q3’18, amid higher household incomes and discretionary spending.
Against this backdrop, Macy’s, among other retailers, is gearing up to offer Black Friday and Cyber Week specials beginning with a preview on Thursday, November 15 and carrying through Cyber Week, which runs from Sunday, November 25 to Wednesday, November 28.
Given some optimism about Black Friday, the department store could well meet its upwardly revised sales guidance.
According to a recent McKinsey & Co. Periscope survey conducted by analysts Yagmur Anis, Brian Elliott, and Christian Koestler, shoppers appear willing to shell out more cash during Black Friday in 2018 –mainly for discounted goods, unique one-off promotions, and Christmas gifts.
Anis, Elliott, and Koestler noted that 16% of their 1,001 U.S. respondents expect to spend US$1,000 or more—up from 9% in 2017—with a “sizable” 22% budgeting US$500 for Black Friday purchases.
As an omnichannel retailer, Macy’s may see a boost across both its traditional stores, as well as through its digital platforms.
According to Periscope, 54% of their U.S. sample “still favor offline shopping when it comes to selecting new clothes.” However, the survey also showed that shoppers across every age category were most likely to “plump” for online purchases “as the ideal antidote to escaping the chaos they say they have encountered when venturing to stores to shop during Black Friday events.”
