Monday, 4 December 2023 Reading time : 3 minutes

The US retail sector had a surprisingly successful start to the holiday shopping season. More than 200 million people shopped for gifts in stores and online over the long weekend after Thanksgiving, according to the US retail trade association National Retail Federation (NRF). This is an all-time record.

Traditionally celebrated at the end of November, Thanksgiving marks the start of the busiest shopping period of the year. Lured by discounts on Black Friday and Cyber Monday, Americans make their first purchases for the upcoming holiday season. While the NRF does not report total industry sales, retailers did well online, with consumers spending approximately USD 38 billion over the five days from Thanksgiving to Cyber Monday – up 8% from last year, according to marketing service Adobe Analytics. However, these figures are not adjusted for inflation, so it is not easy to determine whether stores actually sold more goods or whether the increase was mainly driven by price growth.

The NRF is confident about the holiday season as a whole and expects November and December sales to grow 3% to 4% year-on-year. This is in-line with growth rates recorded before the corona pandemic.

Despite the strong start, the outlook for the holiday season remains uncertain as US consumers have had a difficult year. Life has become more expensive in almost every area, from food and petrol prices to housing costs. It is therefore quite possible that consumers have already done most of their shopping and will hold back in the coming weeks. Retailers have at least partially prepared for a slowdown in holiday sales. For example, discount retailer Target and department store chain Macy's have reduced their inventories to prepare for a possible drop in demand.

How generous shoppers really are will be revealed at the end of the season. Nevertheless, the uncertain outlook offers opportunities for investors. The Barrier Reverse Convertible on Wal-Mart, Costco and Target has a barrier of 60% and pays a guaranteed coupon of 10% per annum with a maturity of one year (indicative terms).

US parcel carriers are getting ready

US parcel carriers are also gearing up for the holiday season, relying on temporary workers to cope with the rush. UPS alone plans to hire around 100,000 seasonal workers. According to estimates from ShipMatrix, US logistics companies will deliver 82 million parcels a day during this year's holiday season, slightly less than last year. In 2022, E-commerce giant Amazon has seized the top spot among US parcel carriers, delivering more packages than UPS and FedEx to American households. The Barrier Reverse Convertible on Amazon, FedEx and UPS with a maturity of one year pays an annual coupon of 12% with a barrier of 59% (indicative terms).