Record turnout for Thanksgiving weekend shopping doesn't bring increase in spending

A record number of Americans went out and splurged on gifts and other goods during Black Friday and continued to shop online through Cyber Monday as the busiest stretch of the holiday shopping weekend got off to a hot start despite concerns about the health of the economy going forward and some lingering concerns about whether consumers will continue to spend.

A record 200 million people shopped in the five-day period from Thanksgiving to Cyber Monday, a 2% increase from the year prior that beat expectations heading into the start of holiday shopping season, the National Retail Federation said Tuesday.

“It was a fabulous turnout,” NRF president and CEO Matthew Shay said. “Certainly speaks to the way consumers are feeling, but also the deals that were out there and the opportunities that retailers provided on goods and items and gifts that consumers wanted.”

Consumers spent an average of $321.41 on holiday-related purchases over the weekend, a modest decline from last year’s total of $325.44. About 70% of the total was spent specifically on gifts. The NRF totals only include purchases for holiday items like gifts, candy and décor and does not include purchases or splurges shoppers made for themselves.

Retailers came into the weekend expecting millions of shoppers who were also wary of spending amid higher prices for just about everything else. Inflation has fallen over the last year, in the most recent consumer price index, but prices are still well above where they were prior to the post-pandemic economic resurgence.

“Overall this was a very strong holiday weekend and it's it is a positive indicator of where we are headed over the next few weeks,” said Phil Rist, executive vice president of strategy at Prosper.

Black Friday was the most popular day for shopping both in stores and online, with 76 million in brick-and-mortar stores and another 90 million who shopped online. Separate data said shoppers spent a Black Friday record $9.8 billion this year, a 7.5% increase from last year. Mastercard SpendingPulse found e-commerce sales increased by 8.5% from last year on Black Friday.

The busy Thanksgiving weekend came after Americans , which ended six consecutive months of gains as consumers continued to power through higher prices and lingering inflation to keep the economy moving.

Consumer spending accounts for about 70% of U.S. economic activity and is a key factor for economists to measure the strength of the economy overall.

NRF is projecting holiday shopping, which it defines as the period from Nov. 1 to Dec. 31, to grow between 3% to 4% from last year and set new records totaling between $957.3 billion to $966.6 billion. The high turnout over the weekend bolstered its expectations about the projections, Shay told reporters on Tuesday.

That figure would roughly match the rate of inflation, which would be a small net decline from last year.

“The complete November retail sales figures won’t be in for a couple more weeks, but I’m getting the sense that consumers are in a frugal mood this holiday season,” said Bankrate senior industry analyst Ted Rossman. “Honestly, sales figures that show retailers treading water is about as good as one could reasonably expect in the current economic climate.”

Many stores offered steep discounts on an array of consumer products, which was a high priority for shoppers heading into the holiday season. Fifty-five percent of consumers said their Thanksgiving weekend purchases were driven by sales or promotions, up from 52% last year. Another 31% said a limited-time deal convinced them to make a purchase they were hesitant about.

Stores have also extended the deals traditionally offered around Black Friday and Cyber Monday for periods beyond the traditional shopping window as consumers look to stretch out their budgets over longer periods.

A strong majority of consumers had already started shopping for the holidays before Thanksgiving and nearly half of them said they were about halfway done, according to NRF.

“This looks like the best holiday season for deals in many years. An improved supply chain and weaker consumer demand have led retailers to cut prices early and often,” Rossman said. “I feel like most people are expecting at least a 25-30% discount on everything they buy right now. This is helping retailers to move merchandise, but cutting into profitability.”