Wealth and Wants

Holiday shopping season off to a slow start in 2020

Analysts expected a Black Friday boom, but with COVID still raging, consumers have stalled their spending


The average shopper spent 14% less from Thanksgiving Day through Cyber Monday, compared with the same period in 2019, according to the National Retail Federation. With COVID still raging, it’s no surprise that consumers have been shy to spend freely.

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It’s still early, but thus far the 2020 holiday shopping season is a bust.

The average shopper spent 14% less from Thanksgiving Day through Cyber Monday, compared with the same period in 2019, the National Retail Federation reports. That’s an average of about $312 a piece (versus $362 a year ago).

This year’s online sales broke records, but still fell short of many analysts’ lofty expectations. Black Friday might as well have been Cyber Friday. Americans spent $9 billion online, according to Adobe Analytics, a 22% increase over 2019.

That means Nov. 27, 2020 temporarily claimed the second-biggest single-day e-commerce total in U.S. history (behind Cyber Monday 2019). Three days later, Cyber Monday 2020 blew past them both with $10.8 billion in online sales.

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The problems, at least for retailers, are twofold

First, there were those high hopes. Adobe initially forecast $12.7 billion in Cyber Monday purchases. The other is that in-store traffic plummeted so much that it dragged down the overall totals. The New York Times dubbed it “Bleak Friday.”

The retail tracker Sensormatic Solutions said in-person activity was down 52% the day after Thanksgiving (year-over-year). We knew the COVID-19 pandemic would suppress in-store shopping, but we thought the online totals would be even more impressive.

The National Retail Federation downplayed the Thanksgiving weekend drop.

“As expected, consumers have embraced an earlier start to the holiday shopping season, but many were also prepared to embrace a long-standing tradition of turning out online and in stores over Thanksgiving weekend to make gift purchases for family and friends,” Matthew Shay, the organization’s president and CEO, said in a statement.

See related: How to save money on holiday shopping

We also projected an early start to the season

A late August survey found a quarter of holiday shoppers intended to begin making purchases by the end of September and nearly half planned to start by Halloween.

It made sense in context: Amazon Prime Day was held Oct. 13-14 (rather than its usual July time slot) and Walmart and Target followed suit with major sales of their own. Yet when the Commerce Department reported the October retail sales figures, they were disappointing. In fact, they barely budged from September and did not meet analysts’ consensus projections.

I think this means one of two things: Either consumers didn’t start as early as they said they would, or if they did, they were very price-sensitive. The latter might be prudent for households but bad for the economy (since consumer spending powers so much of our economic engine). It’s too early to say for sure, but I have a growing suspicion that most holiday shopping forecasts were overly ambitious.

In a projection issued Nov. 23, the National Retail Federation posited that overall holiday sales would rise between 3.6% and 5.2% from 2019 levels. Deloitte submitted their best guess on Sept. 15, a base case of 1% to 1.5% above last year with speculation that the figure could end up a couple of percentage points higher if consumers (especially wealthier individuals) unleashed pent-up demand.

Any increase would be notable given the year it has been

The trough, established back in the spring, was deep. Chase indicated its customers’ credit and debit card spending bottomed on March 30 at a whopping 41% below where it was at the same time in 2019. It has been a mostly steady climb since then. However, after briefly breaking into positive territory for the first time since early March, Chase’s year-over-year gauge nose-dived in late November. Its measure of Black Friday spending fell a precipitous 19% relative to a year prior.

Perhaps the real surprise is that most retail observers were so upbeat in the face of danger. The pandemic continues to rage, setting unpleasant case and hospitalization records with regularity. Some major states and cities are re-implementing lockdown measures in an effort to stem the tide.

The unemployment rate remains elevated, most stimulus programs have waned and there’s no sign that more aid will be coming soon from D.C. We have thankfully seen some breakthroughs on the health front, although widespread vaccine availability is still at least several months away, most health experts suggest.

See related: Consumers would save more of a second stimulus check, study shows

Bottom line

Is it really all that surprising that consumers would be shy to spend freely, particularly if they’re worried about their finances and less able to travel this holiday season? This seems like an entirely rational response.

But rationality has been hard to come by in 2020, as election results are disputed with scant evidence and the stock and housing markets continue to rise almost unabated despite a health crisis of previously unimagined proportions.

It’s going to get better, but we need to get there first. If spending less this holiday season keeps you out of expensive credit card debt, then by all means, that’s what you should do.

Have a question about credit cards? Email me at and I’d be happy to help.

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