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Shoppers flocked to stores Thanksgiving weekend. But did sales follow?

Online shopping outpaced brick-and-mortar, some reports indicate

Several mall landlords reported strong foot traffic on Black Friday and Thanksgiving weekend. (Getty Images)
Several mall landlords reported strong foot traffic on Black Friday and Thanksgiving weekend. (Getty Images)

More people shopped at actual stores this Thanksgiving weekend than last year, creating a bit of momentum and holiday cheer for brick-and-mortar retail owners. But some analysts found that online sales outpaced physical locations.

The kickoff to the holiday shopping season is closely watched in real estate circles as it can signal whether some chains will upgrade or expand their property holdings next year if they do well — or maintain the status quo or consider downsizing if they don't.

An estimated 197 million people shopped during the five-day holiday weekend from Thanksgiving through Dec. 2, or Cyber Monday, according to a survey released by the National Retail Federation on Tuesday. While that surpassed the trade group's initial expectation of 183.4 million shoppers, it was still down from last year’s record of 200.4 million.

And of this year's holiday weekend shoppers, 126 million consumers, or 64%, shopped in stores over the five days, up from 121.4 million, or 61%, last year, according to the NRF. Black Friday was the top day for in-store activity with 81.7 million shoppers, up from 76.2 million last year and the highest level since the pandemic.

The nation's biggest mall landlord, Indianapolis-based Simon Property Group, reported robust foot traffic that it said signaled a good holiday season. Two prominent New Jersey malls, Westfield Garden State Plaza and American Dream, had similar upbeat news. The NRF tracks foot traffic, not sales. And analytics firms, using different methodologies, had varying reports on foot traffic. Several of them found that online sales soared compared with physical retail.

For example, Adobe Analytics found that during what it called "Cyber Week," the five-day period from Thanksgiving to Cyber Monday, online sales were $41.1 billion, up  8.2% year over year. E-commerce juggernaut Amazon on Tuesday said that its Black Friday Week and Cyber Monday holiday shopping event — from Nov. 21 through Dec. 2 — was its biggest ever compared to the same 12-day period ended on Cyber Monday in prior years, with record sales.

Bustling traffic seen

Several mall owners reported that the holiday weekend proved strong for them. Simon, a real estate investment trust, said it enjoyed a solid lift in foot traffic at its centers across the country. Year-over-year traffic was up 5.9% on Black Friday and grew throughout the weekend, including a 6.3% increase on Saturday and 8.2% on Sunday.

"On Black Friday and throughout the weekend, we saw even more evidence of what we already knew: Malls are thriving," David Simon, chairman and CEO of the REIT, said in a statement. "Popular brands throughout our portfolio reported double-digit sales increases over the weekend compared to last year. Coast to coast, we saw lines prior to opening and throughout the day at many of our centers across the country."

Roy Ghermezian, a principal of Triple Five Group and the American Dream megamall in East Rutherford, New Jersey, discussed his property's performance on LinkedIn.

"While national retail traffic saw declines — 3.2% lower year-over-year (RetailNext) and a 1.85% drop in store visits (Pass By) — American Dream soared," Ghermezian posted. "Foot traffic surged 25% over the last two Black Fridays."

Garden State Plaza mall in Paramus, New Jersey, reported a strong turnout for Thanksgiving weekend shopping. (CoStar)

Garden State Plaza mall in Paramus, New Jersey, owned by global retail giant Unibail-Rodamco-Westfield, reported a big holiday turnout.

“This Black Friday was the best Westfield Garden State Plaza has experienced since 2018, marked by high customer turnout, effective promotions, and discounts, all contributing to strong sales growth,” Wesley Rebisz, the property's senior general manager, told News 12 New Jersey. "This was the mall’s best Black Friday since 2018 and pre-COVID, from both a sales and traffic perspective."

Online shoppers down

Over the holiday weekend online shoppers totaled 124.3 million, down from 134.2 million shoppers last year, according to the NRF. On Black Friday itself, roughly 87.3 million shopped online, down slightly from 90.6 million last year but outpacing Cyber Monday this year.

The increase in Thanksgiving weekend in-store shoppers demonstrated the enduring appeal on brick-and-mortar retail, according to Phil Rist, executive vice president of strategy for Prosper Insights & Analytics, which conducted the survey with the NRF. On a call with reporters, he said he wanted to underscore the importance of "humans wanting to be with other humans."

According to Rist, "Shopping online is at, you know, convenient, but it's also lonely. ... So [in-store shopping] is a great opportunity to be with family and friends and shop and enjoy the season and the traditions."

The NRF figures "clearly show that the consumer has used both online and stores to meet their Black Friday needs," according to Neil Saunders, a retail analyst and managing director of analytics firm GlobalData.

"Yes, online is convenient, but stores still provide a certain excitement and experience," he said in an email to CoStar News. "This isn’t an either stores or online holiday, it’s about offering the consumer the best of both worlds. However, stores need to realize that consumers have a choice of where to shop and that means taking out friction and producing an interesting and enjoyable experience are vital."

Contrary view

Rudolph Milian, president and CEO of retail consultant Woodcliff Realty Advisors, wasn't very bullish on physical retail's performance on the holiday weekend.

"My biggest takeaway is that foot traffic and sales at physical stores were very soft, actually mostly down, not up from last year based on NRF data and Sensormatic’s ShopperTrak," Milian said in an email to CoStar News. "Mastercard SpendingPulse reported U.S. retail sales excluding automobiles were up 3.4% year-over-year on Black Friday, but mostly because of e-commerce sales, which jumped 14.6%. When you extrapolate the hike from online spending, Mastercard SpendingPulse reported in-store sales rose just 0.7%, well below when adjusted for inflation."

On the media call, NRF President and Matthew Shay pointed out that because Thanksgiving fell so late this year, some holiday spending had been pulled ahead of that day.

"What we've seen is that we expect a very healthy holiday season," he said. "Consumers are spending, retailers are feeling positive about the holiday season. ... One difference, of course, this year that is impacting some comparisons — that has certainly impacted inventory and the timing of deals — is the shortened shopping period between Thanksgiving and Christmas. This is five days shorter than a year ago for a total of 26 days between Thanksgiving and Christmas. Having said all that, we know that while consumers did begin their shopping earlier than ever, holiday shoppers still have approximately half of their shopping remaining and they'll continue to look for promotions and bargains to stretch their dollars."

Milian came to a totally different conclusion.

"If anything, traffic and sales should have been up because Black Friday weekend fell much later this year than last year," he said. "This is probably due to a consumer that is overextended with debt, such as credit card debt, student debt, auto loans, most debt payable with higher interest rates than two years ago. Additionally, while the inflation rate has been reduced, retail prices are still much higher than in the each of the past three years, something that demonstrates how the consumer is burdened with high prices this holiday season."

Naveen Jaggi, president of Retail Advisory Services, JLL, offered his own observations of Thanksgiving brick-and-mortar shopping.

“Over the weekend, I noticed an urgency among consumers to purchase essential items in person," he said in an email to CoStar News. "There was a sense of inventory lightness in several places, and with a short holiday season, it seems consumers feel more secure having products in hand rather than waiting for deliveries. The prevailing sentiment was about reducing the risk of missing out by shopping in-store.”

The NRF acknowledged that there are a variety of takes and an assortment of analysis of the holiday weekend's results.

"The reports that are out there differ widely, but everyone agrees the weekend performed well," and NRF spokeswoman said in an email to CoStar News. "It’s important to note that NRF tracks number of shoppers, not total sales. And for foot traffic, the major players who track this data tend to be very mall focused when we know that physical retail space has evolved and interest in shopping discount has also grown."