NEW YORK: US retailers cheered a buoyant start to the holiday shopping season on Tuesday (Nov 29), but warned that a potential freight rail strike could still cripple the critically busy period.
In spite of grinding inflation, customer counts on “Black Friday” and throughout the Thanksgiving holiday shopping weekend jumped from last year, exceeding expectations, according to data from the National Retail Federation (NRF).
Surveys had suggested shopper reticence, but “there’s a difference between attitude and action”, said NRF President Matthew Shay.
Consumers “say one thing and do another”, added Shay, who characterized the robust labor market as an offset to the drag from higher costs for gasoline and household staples.
The NRF’s survey estimated that 196.7 million Americans shopped in stores in the five-day stretch between last Thursday’s Thanksgiving and “Cyber Monday”, spending an average of US$325.44 on holiday-related purchases.
The number of shoppers accounts for almost 60% of the US population and stands 17% above the 2021 level, with most of the increase coming from a resurgence in physical shopping after ecommerce saw heady growth the last two pandemic-affected seasons.
The NRF has projected that holiday retail sales will grow between 6% and 8% over 2021 to as much as US$960.4 billion for the entire season.
“We continue to expect a healthy holiday season,” Shay said. “Consumers are spending and generally speaking, retailers are feeling positive about their inventory levels.”
But he emphasised that a rail strike would have “devastating” effects on the consumer-driven US economy, employing the same word US President Joe Biden used on Monday night in calling on Congress to intervene in the matter.
The issue has come to a head after workers at four of 12 freight rail unions rejected a September agreement between the rail industry and organised labour, setting the stage for a potential strike on Dec 9.
The proposed contract, reached after lengthy negotiations involving the White House, includes hefty wage increases but no paid sick leave.
Shay endorsed Biden’s message, noting that a rail strike would stress the nation’s transport system at a time when it is still recovering from supply chain problems.
But beyond the direct impact on commerce, Shay said a rail strike also had potential to dent consumer sentiment in a way similar to government shutdowns and other “external” events that have crimped prior holiday seasons.
A strike could hit consumer sentiment “at the worst possible time”, he said. – AFP