Target continues to top the lists of major retailers thriving during the pandemic, even as many businesses struggle. CEO Brian Cornell recently pointed to one factor that has allowed Target to make the best out of an unprecedentedly bad situation — the fact that at Target you can buy most anything.
The retailer has been seeing a type of guest recently that shops all of its categories, Mr. Cornell told CNBC’s Squawkbox. He described the chain’s diverse product assortment as being especially important during the pandemic, since customers are attempting to limit the number of trips they make to stores. For example, Target has found parents with kids who are quickly outgrowing clothing visiting the store to buy private-label apparel, then moving to adult clothing sections and on to food and beverage.
Mr. Cornell’s statements come after Target posted outstanding third-quarter results with increases both in digital and physical sales. The chain saw online sales jump 155 percent and physical store sales increase 9.9 percent. The retailer’s pandemic-era success is also shared by its bigger rival, Walmart, which reported likewise impressive third quarter numbers, including a 6.4 percent gain in same-store sales.
While the Squawkbox interview touted the in-store experience as the basis for Target’s expectation-busting quarter, the chain has also been notably successful in its leveraging of delivery and curbside pickup/BOPIS, services that have become essential to customers during the novel coronavirus pandemic.
Discussion Questions: Do you agree that one-stop shopping is the key to Target’s recent success and will it remain so after the threat from COVID-19 diminishes? Should more specialty retailers broaden their mix to try and compete with chains like Target or would that, in most cases, be a mistake?
Comments from the RetailWire BrainTrust:
The pandemic had a weird impact on marketing fundamentals: since one-stop shopping brands (e.g. Amazon, Walmart, Target) have grown successfully, it can create the feeling that “offering everything to everyone” is the right approach. Other brands like Sears have tried this before, and were eventually bypassed by newer, more focused brands that better met the needs of their specific target group. A clear brand promise that solves a key problem of a well-defined core customer will remain fundamental to business success.
Xavier Lederer, Business Growth Coach, Founder & CEO of Ambrose Growth
One-stop shopping is surely helping Target, but that’s not the only reason they are excelling right now. They have created a great shopping experience, from the private brand merchandise, to the renovated store layouts, to the fulfillment options. If they keep innovating and focusing on customer experience, I believe their success will continue long after this pandemic.
Lauren Goldberg, Principal, LSG Marketing Solutions
Specialty retailers should not broaden their mix to compete with chains like Target. That is the fastest route to insolvency: competing on the dominant player’s strength. Instead, they should establish credibility in their niche, go deep, and add service elements to differentiate further. Use data to craft higher engagements and launch or enhance cutting edge data science-based loyalty programs.
As for Target, the company has been steadily shoring up its core strengths of merchandising, expanding grocery, and integrating online and offline shopping. The stores are bright, colorfully displayed, and the associates are helpful. So while the COVID-19 pandemic shifted purchase behavior to online and consolidated physical store visits, the brand’s underlying strengths allowed it to outperform others.
Mohamed Amer, Independent Board Member, Investor and Startup Advisor
Target has gotten it right in MANY ways. I don’t think they will slow down their innovation, their commitment to the consumer experience, integration of omni-present options, and delivery of consistent prices and quality. Not every retailer can navigate such a balance — but Target has raised the bar.
Dave Wendland, Vice President, Strategic RelationsHamacher Resource Group
Just when you think Target is on a roll — their CEO claims their success is due to “one-stop shopping”? C’mon. If that’s the case, Amazon and Walmart will win as they offer better selection and (mostly) better pricing. If other retailers heed Target’s advice and expand their assortment it will be a losing strategy. Target’s recent success is due to multiple factors: pre-pandemic emphasis on digital options, ability to pivot in an agile manner, and most likely a loyal shopper base because of Target’s unique assortment and good pricing.
Michael La Kier, Principal, What Brands Want, LLC
Minimizing store visits as an omnichannel one-stop shop helps consumers access essentials and mitigate health risks. Investing in a robust assortment, including private label grocery, has inspired Target shoppers to fill their carts. As a one-stop shop, Target will still earn loyalty after the pandemic for its convenience, time savings and quality. Broad category management boosts complexity, so specialty retailers seeking to compete with Target face steep barriers to entry. Dominating a niche makes more strategic sense for them.
Lisa Goller, Content Marketing Strategist
Read the entire RetailWire discussion here.
Headlines of the Week
McCormick to add more heat with Cholula acquisition
McCormick & Co. has entered into an agreement to acquire the Cholula Food Co., the maker of Cholula Hot Sauce, from private equity firm L Catterton, Greenwich, Conn., for $800 million. Cholula’s hot sauce portfolio features six flavor varieties that are sold at retail and foodservice. Cholula’s annual sales are approximately $96 million, according to McCormick, and are expected to grow mid- to high-single digits in a normalized environment beyond COVID-19. McCormick said Cholula’s products are complementary to the company’s existing hot sauce portfolio, which includes such brands as Frank’s RedHot. Strategic initiatives around the brand include increasing Cholula’s brand awareness, increasing the availability of its products, and extending the Cholula brand into new formats and eating occasions to drive trial and household penetration. L Catterton acquired Cholula in April 2019 and established it as a standalone company.
ascena retail group Signs Asset Purchase Agreement with Sycamore Partners
ascena retail group, inc. announced that it has entered into an asset purchase agreement with Premium Apparel LLC, an affiliate of Sycamore Partners, a private equity firm specializing in consumer, retail and distribution investments, to sell ascena’s Ann Taylor, LOFT, Lane Bryant and Lou & Grey brands. Premium Apparel will acquire the brand assets for a purchase price of $540 million, on a cash-free and debt-free basis, subject to certain adjustments, and the assumption of certain liabilities. Under the APA, Premium Apparel has committed to retaining a substantial portion of the retail stores and associates affiliated with these brands. The transaction is expected to be completed by mid-December. As previously disclosed, FullBeauty Brands Operations, LLC has completed its acquisition of Catherines’ intellectual property assets and e-commerce business, and Justice Brand Holdings LLC, an entity formed by Bluestar Alliance LLC, has completed its acquisition of the intellectual property of Justice.
Apparel & Footwear
L Brands names a new chief to lead Victoria’s Secret, as it works to revive the lingerie brand
L Brands announced Wednesday a new head of its Victoria’s Secret lingerie business, as it works to revive the brand. Effective immediately, the company has tapped Martin Waters, current head of L Brands’ international division, as CEO of Victoria’s Secret, replacing John Mehas, who has served in the role since February 2019. It also named Laura Miller, previously chief human resources officer at Royal Caribbean Cruise Lines, as chief human resources officer of Victoria’s Secret. L Brands earlier this month reported better-than-expected quarterly results, with record sales at Bath & Body Works and higher demand at Victoria’s Secret. Same-store sales at the latter were up 4%, boosted by sales of sleep and lounge wear. More women are looking for comfortable clothes to wear as they spend more time at home during the pandemic.
With a new chief executive-creative director duo at the helm, Diesel is forging ahead with founder Renzo Rosso taking a big step back. When Massimo Piombini visited Diesel’s Italian sneaker factory in June, five months after becoming chief executive, he faced an immediate dilemma. “I didn’t like the collection. I didn’t like the strategy behind it. I didn’t like anything,” says Piombini, who had left his Paris-based job as CEO of Balmain to join the Italian denim brand. His challenge was to confront his new boss, Diesel founder Renzo Rosso, who often calls the brand his “baby” and at the time led creative direction at the label he founded in 1978. In Rosso’s office that afternoon, 59-year-old Piombini says he proposed that Diesel build a new dedicated sneaker business, hiring fresh designers, merchandisers and suppliers. Rosso listened, Piombini says, and replied, “Okay. Go ahead.”
Athletic & Sporting Goods
Dick’s Sporting Goods announced its current president, Lauren Hobart, will succeed Ed Stack as chief executive on Feb. 1. Stack, 65, will transition to executive chairman and remain chief merchant, the company said. He took over the business from his dad, Dick Stack, in 1984, at age 29. He took the company public in 2002. The announcement comes as Dick’s Sporting Goods continues to reap the benefits of consumers buying more workout gear, sporting goods and outdoor equipment during the coronavirus pandemic. Its e-commerce sales surged 95% during the third quarter, and it reported record quarterly same-store sales growth of more than 23%. The company also cited strength in the golf category.
Under Armour exits yet another school sponsorship deal as part of big shrink
Under Armour has backed out of another expensive university apparel sponsorship deal, its third in the past six months. According to the Baltimore Business Journal, the Baltimore-based apparel company has agreed to a $9.75 million exit fee to get out of its 10-year, $50 million deal with the University of Cincinnati. The contract began in 2015 and had five years remaining on it. Under Armour will also provide $3.65 million worth of product through June 2021, according to the report. (Under Armour declined comment, saying the company “does not disclose contractual details of partnerships.”) The exit comes after Under Armour in June also sought to exit its 10-year, $86 million sponsorship of the University of California Berkeley (the school called Under Armour’s attempt to exit “improper”) and its 15-year, $280 million sponsorship of UCLA (that school is suing). At the time it was signed, Under Armour’s UCLA contract was the biggest college sports apparel deal ever, but by June UA was citing “lack of marketing benefits” from the sponsorship.
Cosmetics & Pharmacy
Beauty Banks on Discounts, D-to-c for Holiday
Holiday shopping is going to look different this year. In beauty, it’ll mean more discounts, more e-commerce sales — and a lot of finger-crossing. To end up on par with last year, the U.S. prestige beauty landscape would need to do $9 billion more in sales before year end, according to Larissa Jensen, beauty industry analyst at The NPD Group. Chances of that happening are slim to none, Jensen said — but that doesn’t mean the industry isn’t going to try. “In terms of performance year-to-date, we’re down about 21 percent, so we’re counting on holiday to be better,” Jensen said. “Looking at November numbers so far, we’ve got two weeks in November, it’s not looking so good.…October performed better than November, to be honest.” That could be because people are waiting to do their beauty shopping until the Black Friday/Cyber Monday promotional period, Jensen said, but those orders may face shipping delays as brands and retailers struggle with e-commerce logistics. For beauty, expected increases in online shopping may have broader sales complications — the category has long depended on IRL shopping and related impulse purchases of cute, giftable items near the cash wrap.
What’s Driving L’Oréal’s Consumer Products Division’s Growth?
L’Oréal’s Consumer Products Division was back to black in the third quarter of 2020, buoyed by a three-pronged recovery plan. The first part of the acceleration strategy, which was conceived during France’s first lockdown this spring, was to maintain a strong innovation pipeline, so “we could come back now in the back half of this year, next year with strong, relevant innovations,” said Alexis Perakis-Valat, president of the Consumer Products Division. He cited as an example L’Oréal Paris Revitalift Retinol Night Serum, which is launching in the U.S. The largest division within the world’s biggest beauty maker, the Consumer Products Division saw organic sales rise 0.8 percent to 2.86 billion euros in the July-to-September period, despite wide exposure to the soft makeup category. Of the more than seven billion product references L’Oréal sells, more than five billion come from that division. Its Garnier brand registered a double-digit sales increase, and L’Oréal Paris, the world’s largest beauty label, returned to growth during the period, as did the Consumer Products Division in North America, among the quarterly highlights.
Discounters & Department Stores
Walmart adds to its last-mile arsenal with acquisition of startup assets
Walmart plans to acquire assets, including talent, technology and intellectual property, from JoyRun, a startup that runs a peer-to-peer last-mile delivery service, according to a LinkedIn post by Srini Venkatesan, executive vice president at Walmart Global Tech. The deal is set to close “in the coming weeks,” according to the post, and JoyRun employees will be part of Walmart’s supply chain technology team.
Nordstrom shares rise as retailer shows signs of recovery, helped by its Anniversary Sale
Nordstrom shares got a lift Tuesday after the department store reported that its third-quarter sales picked up more than analysts had anticipated. Digital sales in the three-month period were $1.6 billion and represented 54% of the retailer’s business. Nordstrom CEO Erik Nordstrom said the retailer is also looking toward the future with the Covid-19 vaccine and anticipates “pent-up customer demand, particularly around occasions like travel or in- person social events.”
Macy’s Thanksgiving Day Parade takes flight in virus times
The balloons were in the sky and the marching bands took to the streets for the annual Macy’s Thanksgiving Day Parade on Thursday, but coronavirus restrictions meant it was without the throngs of people usually scrambling for a view. Instead of its typical path through Manhattan, this year’s parade was kept to the area in front of Macy’s flagship store and aimed at a television audience instead of live crowds. There were some familiar balloon faces, of course, including Snoopy, Ronald McDonald, and SpongeBob SquarePants. But the bigger balloons were missing the numerous handlers who would normally be walking underneath and holding the ropes. This year, they were attached to vehicles that kept them moving and decreased the number of people needed.
Why off-price won’t change much, even after a pandemic
In the last two decades, after more or less sailing through the Great Recession and despite going against the tide in e-commerce, off-price retail has seemed invincible. Consumers at all income levels flock to these stores, pawing through racks in search of marked-down treasure. The pandemic interfered with that. Before this year, benefits accrued to off-pricers in situations where other retailers faltered. In good economies their shoppers have the wherewithal to go often, all the better to find goodies that might appear within the rapidly replenished assortments; in weak ones shoppers come for the low prices.
Emerging Consumer Companies
MeUndies, the Los Angeles-based apparel brand, has raised $40 million from Provenance, all of which will be used for the purchase of secondary shares. MeUndies has been profitable for the last five years and sales are projected to hit nearly $100 million this year, up from about $75 million in 2019. Since its founding in 2011, MeUndies has raised $10 million. The company will look to expand its wholesale and retail business.
Boulevard, L.A.-based spa management and payment platform, raises $27 million
Boulevard, a Los Angeles-based spa management and payment platform founded in 2016, has raised $27 million in a new round of funding. Investors include Index Ventures, Toba Capital, VMG Partners, Bonfire Ventures, Ludlow Ventures and BoxGroup. The Boulevard platform is one part Shopify and one part ServiceTitan. Today, the company has ninety employees and will look to increase that number as it continues to expand across the country.
Mother Raw, maker of plant-based dressings and condiments, raises $6.1 million
Mother Raw, the Toronto-based maker of plant-powered dressings, marinades, dips, condiments and quesos, announced the closing of its $6.1M USD Series A round. The round of funding was led by new investor Forage Capital Partners, alongside Export Development Canada (EDC) and with substantial support from existing investor Whitecap Venture Partners. The new capital will help drive growth of Mother Raw across North America. The brand plans to expand its distribution footprint, increase R&D efforts for new product innovation, and amplify marketing and sales initiatives. Sales for Mother Raw have grown 247% from 2019 – 2020, with over 1,600 new retailers in the U.S. coming aboard, including Meijer, Pavilions, Sprouts, Target, Walmart Canada, Whole Foods and more, even during the pandemic.
Grocery & Restaurants
Torchy’s Tacos sells $400 million stake to new investors
Torchy’s Tacos has sold a $400 million stake in the company to a new group of investors, the company said Friday. The Austin, Texas-based taco brand said General Atlantic, a global growth equity firm that initially invested in 2017, would be joined in the ownership group by D1 Capital Partners, T. Rowe Price, Lone Pine Capital and XN in the new funding round, which will be used to expand the 83-unit fast-casual brand. A company spokesperson said the deal was valued at “about $400 million.” Founded as a food trailer in Austin in 2006, Torchy’s Tacos has become a “craft casual” brand that offers tacos, queso and margaritas. Despite the challenges of the COVID-19 pandemic, Torchy’s opened 12 new locations this year and expanded the brand to three additional states, bringing the total to seven. Torchy’s Tacos now has 83 locations in Arkansas, Colorado, Kansas, Louisiana, Missouri, Oklahoma and Texas.
HelloFresh Acquires Factor75 Meal Kit Startup
HelloFresh is taking another big step toward strengthening its leading position in the U.S. meal kit market. The German meal kit company is acquiring Factor75 Inc., a Chicago-based meal kit startup, for $177 million. Factor is a provider of fully-prepared fresh meals that combine health, convenience and restaurant-quality taste. The acquisition marks the next step in HelloFresh’s growth plan in the U.S. to strengthen its leading position and to expand its total addressable market. The acquisition brings together HelloFresh’s global expertise in delivering fresh ingredients to customers’ doorsteps across 14 countries with Factor’s success in ready-to-eat meals. Both companies say they share a strong vision for operational excellence and a data-driven approach to delight customers with great meals consumed at home. As a result of the deal, HelloFresh will gain its first office in the Chicago area, along with four production and fulfillment facilities. A new facility, which will be launched in the near future, will provide capacity to deliver more than $500 million worth of prepared meals annually. Factor’s full year revenue for 2020 is expected to reach around $100 million.
Home & Road
Furniture Insights: New orders up 43% in Sept.
September marked another boom month for the industry with new orders rising 43% compared with September 2019 according to the latest Furniture Insights survey of residential furniture manufacturers and distributors from accounting and consulting firm Smith Leonard. That came on the heels of a 51% increase in orders for August, 39% in July and 30% in June compared with the same months last year. “The September increase was in line with expectations based on what we were hearing,” said Smith Leonard Partner Ken Smith, adding that 91% of survey participants reported order increases that month. Year-to-date, new orders were 11% ahead of 2019’s first nine months of 2019, with some 56% of the participants reporting increased orders up from 34% reporting increases in August. September shipments rose 4% from September 2019 levels following a 3% increase for August and up in September for 59% of surveyed companies.
Mattress importers moving to Taiwan, Bangladesh, India
Mattress importers are moving their operations from Vietnam, Thailand and Cambodia to Taiwan, Bangladesh and India, according to a report from Piper Sandler. Piper Sandler says the moves are in response to high preliminary antidumping duties assigned to Vietnam, Thailand and Cambodia. “Mattress production appears to already be shifting,” the firm wrote in a report on the impact of the preliminary antidumping duties announced in late October. “Based on our industry conversations, we believe the overly prohibitive antidumping duty rates for Thailand, Cambodia and Vietnam are because these were the primary countries that Chinese manufacturers moved to in early 2019 to avoid the China antidumping rates,” Piper Sandler said. Piper Sandler said pricing of mattress imports could move up, perhaps from 5% to 15%, as a result of the production changes and moves to new countries. But it said many domestic manufacturers are also moving up prices by a comparable amount in the fourth quarter.
Jewelry & Luxury
Jewelry sales staging a holiday comeback as shoppers look to add sparkle to challenging year
Signet, Tiffany and Kendra Scott will try to drive sales this holiday season by encouraging jewelry purchases as a romantic gesture, a Zoom accessory or a way to add sparkle to a very challenging year. Sales of jewelry from March to October were down by about 30% year over year, according to data from The NPD Group — but they have recovered in recent months, and the holidays could give the industry a lift. A new pair of earrings or necklace could also serve as an alternative to experiential gifts such as spa gift cards or vacations.
WD Settles Litigation With Pure Grown, IIa Technologies
The Carnegie Institute of Washington and M7D Corp.—the Maryland company that does business as WD Lab Grown Diamonds—have ended their nine-month patent battle with Pure Grown Diamonds and its sister company, the Singapore-based IIa Technologies. In a joint motion to dismiss, filed Nov. 19 in the U.S. District Court for the Southern District of New York, lawyers for the two sets of parties announced they have finally settled their case, which dates back to January. The motion did not stipulate any conditions.
The 10 Best-Selling Luxury Labels Generate Over Half of the Market’s Sales, Report Says
The market may seem flooded with purveyors of luxury goods these days, but elite brands still dominate the sector, according to a new report. Before the pandemic brought the luxury market to a screeching halt, it was doing unprecedented business. The top 100 companies generated revenue exceeding $281 billion in 2019, up $15 billion from the year prior. And that number was buoyed by the market’s most successful labels. In fact, the top 10 best-selling brands raked in over half of that sum all on their own, according to a new report by Deloitte. Unsurprisingly, France’s LVMH––owner of labels like Louis Vuitton, Dior and Fendi––came out on top with $37.5 billion in revenue. That figure was followed by Kering––owner of Gucci, Balenciaga and Saint Laurent, among others––with a still-impressive but markedly lower $17.8 billion.
China Is Headed To Be The World’s Largest Luxury Market By 2025, But American Brands May Miss Out
The Covid pandemic took a big bite out of the reliably buoyant luxury market. The personal luxury goods market, which includes fashion, jewelry, watches and beauty, will drop 23% this year to $257.5 billion, the largest annual decline in history and the first time sales have dropped since 2009, according to Bain’s 2020 Fall Luxury report. The luxury market won’t reach 2019 levels until 2022 or 2023, but 2021 is still in question since the second wave of Covid is threatening the recovery that started in the second half of this year. Currently, Bain is predicting 10% to 19% growth in 2021. Besides months of store closures, the luxury market has suffered from the travel bans put in place early, followed by luxury consumers’ reluctance to travel abroad. Europe suffered the biggest hit, dropping 36% this year, with sales in The Americas down 27%.
Office & Leisure
Book publishers worry that Barnes & Noble hack will spur holiday snafus
Barnes & Noble has concluded that a cyberattack against its computer systems last month didn’t compromise customer data — even as publishers worry the aftereffects could muck up book distribution during the crucial holiday season. In an exclusive interview, B&N CEO James Daunt said the giant bookseller now believes the data breach it disclosed in mid-October was the result of an odd “ransomware” attack — odd partly because the hackers never demanded a ransom. Cybersecurity experts told the company the breach had all the earmarks of such attacks, which typically come from Russia, Ukraine and other Eastern European countries. It remains unknown where the attack originated, Daunt said. On the positive side, the bookseller’s boss said the company’s cybersecurity experts found “zero customer data was compromised.” They eventually determined that the hackers gained access to B&N’s systems through a network used by publishers known as the Electronic Data Exchange (EDI).
Guitar Center files for bankruptcy, plans to keep stores open
The nation’s largest retailer for musical instruments has filed for bankruptcy. Business Insider reports Guitar Center filed for Chapter 11 bankruptcy protection on Saturday in a move “to significantly reduce our debt and enhance our ability to reinvest in our business.” The company said it’s been hit hard by the coronavirus pandemic, which also largely shut down live music performances, but said it plans to emerge from bankruptcy by the end of the year. Guitar Center said it plans to stay open during the bankruptcy process. The company has 269 stores in the U.S. CNN reports the 61-year-old company received up to $165 million in new equity investments and lenders agreed to reduce its debt by nearly $800 million from roughly $1.3 billion. Guitar Center’s primary owner, Ares Management Corporation, as well as new equity investor Brigade Capital Management and a fund managed by The Carlyle Group will reportedly help finance the company through bankruptcy.
Regal’s owner Cineworld gets $750 million lifeline to avoid bankruptcy
Regal Entertainment’s UK-based owner Cineworld said that it secured a financial lifeline to help it avoid a bankruptcy filing. Lenders will provide the movie-theater owner with a $450 million loan to help it keep afloat through the coronavirus pandemic. Other lenders will provide Cineworld with additional flexibility on its revolving loan and other debt with various measures, providing it with more than $750 million of extra liquidity. Cineworld said the loans will give it “financial and operational flexibility until lockdown restrictions in key jurisdictions are eased and studios are able to bring their enhanced pipeline of major releases back to the big screen.” Movie theater owners worldwide have been under immense pressure as COVID-19 cases continue to rise, prompting a second wave of lockdown restrictions and more stringent guidelines. Theaters also face the challenge that major Hollywood studios have been delaying blockbusters or sending them straight to streaming, leaving cinemas with few new movies to show customers.
Technology & Internet
Best Buy’s domestic online sales grow 174% in Q3
Online sales at consumer electronics retail chain Best Buy Co. Inc. grew rapidly and more than doubled as a percentage of total sales during the retailer’s fiscal third quarter. Best Buy reported domestic online revenue of $3.82 billion in the quarter, which ended Oct. 31, up 173.7% from the comparable period a year earlier. Online sales increased to about 35.2% of total revenue during the period, up from 15.6% for the year-ago period, the company reported. “We have seen elevated growth in new customers since the beginning of the pandemic. In Q3, we also saw strong growth in customers we haven’t seen in a while, who have re-engaged with us as well as sales growth from our current engaged customers,” said Best Buy CEO Corie Barry in a Tuesday conference call with analysts.
FedEx, UPS can’t get enough vans to keep up with delivery rush
FedEx Corp. and United Parcel Service Inc. are running into a shortage of delivery vans, prompting a surprise cost squeeze that’s cutting into profits during a record surge in package volumes. Urged by the couriers to purchase any vans they can scrounge up, leasing companies are dipping into the used market. Added demand in the rental market “is creating shortages,” a UPS spokesman said by email. The van drought sprang from pandemic-induced shutdowns at factories that build the high-ceiling and box-like vehicles—just as soaring ecommerce ratcheted up demand for home deliveries. Amazon.com Inc. said it hasn’t seen signs of a shortage.
Finance & Economy
U.S. economy grew at an unrevised 33.1% rate in the third quarter
Gross domestic product grew at an unrevised 33.1% annualized rate, the government said in its second estimate of third-quarter output, confirming the economy’s historic pace of expansion in the third quarter. The economy contracted at a 31.4% rate in the second quarter, the deepest since the government started keeping records in 1947, the Commerce Department reported. But the fiscal stimulus has largely expired and another rescue package is expected only after President-elect Joe Biden is sworn in on Jan. 20.
US consumer confidence drops to 96.1 as virus spreads
U.S. consumer confidence fell to a reading of 96.1 in November as rising coronavirus cases pushed American optimism down to the lowest level since August. The November reading by the Conference Board represents a drop from a revised 101.4 in October. The decline reflected a big drop in consumer expectations for income, business and labor market conditions. Consumer confidence is closely watched for signals it can provide of how willing households are to spend. Consumer spending accounts for 70% of economic activity in the U.S.
Black Friday hits record $9B in US consumer spending
Black Friday shoppers in the U.S. spent a record $9 billion this year, despite concerns of surging COVID-19 cases across the U.S., according to data from Adobe Analytics. That figure represents a nearly 22% year-over-year increase in consumer spending; Black Friday shoppers spent $7.4 billion in 2019, Adobe Analytics found. Smaller retailers saw a 545% surge in sales on Black Friday compared to an average day last month and ahead of Small Business Saturday – a day dedicated to supporting small businesses after Black Friday.
