The holiday hype machine shifts into overdrive from Thanksgiving through New Year’s with retailers bombarding consumers to spend big on gifts, decor and indulgences. But data reveals the year-end quarter may not be as make-or-break across retail categories as the frenzy suggests.
There’s no doubt stores rely heavily on festive shopper spirits. Overall, Q4 captured 26.8% of total 2022 Commerce Department retail sales – slightly above the 25% that would indicate evenly distributed revenue. However, performance trajectories diverge widely for discretionary retailers compared to everyday staples merchants.
Gift-oriented and event-driven categories like department stores, clothing, toys, jewelry, hobby outlets etc. justifiably build entire strategies around holiday bumps, deriving up to 40% of yearly sales then per McKinsey. GameStop exemplifies the extreme ceiling, having amassed over 37% of total 2021 revenue in fiscal Q4. Winter splurging makes or breaks them.
By contrast, consumer necessity categories remain relatively insulated from seasonal swings. Grocery stores for instance logged just 26.3% of 2022 turnover in the holiday quarter, Statista data shows. Apparently people also read consistently, with bookstores at only 27.4% Q4 dependence.
We see further confirmation in auto, gas and building materials sectors actually performing worst in their fiscal Q4’s historically. Big ticket durables and consistent drivers of spending tend not to spike for the holidays.
So discussion around an overall overhyped holiday impact feels slightly distorted. Certain discretionary merchants truly live or die by holiday quarter results. But for every gift store, countless everyday outlets rely primarily on serving year-round needs rather than wishes and whims. Beyond the toys and trinkets, retail chugs along steadily from New Year’s through the next Black Friday.
