"Good morning. I've spent the past several days digesting consumer data. Countless headlines breathlessly trumpeted a Black Friday bonanza after MasterCard Spending Pulse estimated retail sales rose 4.1% to a new record on shopping's biggest day of the year, with online spending easily outpacing in-store shopping. Salesforce found strong online growth in dollar terms and forecasts for the same trends on Cyber Monday."
"But there's still plenty to worry about for CEOs, especially those of any consumer-facing company. For one thing, the spending growth is fueled almost entirely by inflation and not shoppers buying more items. Salesforce, which tracks online spending, found order volumes fell 1% compared to last year while average selling prices increased 7%. Volume barely budged in 2024 either, so consumer spending has been stagnating for two years now."
"For another, Adobe found that consumer use of "Buy Now Pay Later" services, especially popular among younger consumers, rose 11% on Black Friday compared to last year, suggesting these shoppers are struggling to stretch their dollar. The more affluent were, of course, the exception once again, buoyed by a stock market that is making them feel wealthy: Salesforce found luxury clothing and accessories saw the biggest growth of any category, rising 21%."
Retail sales on Black Friday reached a record in dollar terms, led by strong online spending, but much of the growth came from higher prices rather than more purchases. Order volumes tracked by Salesforce fell 1% year-over-year while average selling prices rose 7%, and volumes have shown little improvement across 2024. Use of Buy Now Pay Later services jumped 11% on Black Friday, signaling younger consumers are stretching budgets. Higher-income shoppers benefited from a rising stock market, fueling 21% growth in luxury clothing and accessories. Overall consumer spending remains uneven, deal-focused, and selectively prioritized.
Read at Fortune
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