Black Friday And Cyber Monday Discounts Retailers (XRT)

Black Friday and Small Business Saturday are now in the rearview and Cyber Monday is underway as the holiday shopping season is off to the races. There has been a secular shift to online shopping over the past decade meaning Black Friday has a larger online element than the early bird in-store sales of yesteryear. Cyber Monday, meanwhile, may not be the main e-commerce-focused shopping day of the post-Thanksgiving week. Regardless, data from Adobe showed record online sales this year on Black Friday. While those actual sales figures are perhaps a more concrete and noteworthy data point to gauge the success of the day in generating sales, we would note that Google Search activity for the shopping day has been on the decline in the month of November (when it peaks) for the past few years now. The pandemic in particular has resulted in a sharp downward move in searches for the term. In fact, this year is on pace to have seen the lowest search interest for “Black Friday” since 2007, though with the month not quite over, data is still technically incomplete and can be revised higher.

Similarly, news story mentions of Black Friday and Cyber Monday have generally trended lower over the past few years. In the chart below, we show the number of monthly news story mentions as tracked by Bloomberg in November of the terms throughout the past decade. To make it read similar to the chart above, we have indexed these readings to their peaks at 100.

Cyber Monday mentions peaked all the way back in 2018 and are currently around the low end of readings of the past several years. Black Friday, meanwhile, peaked last year, but that appears to have been a bit of an outlier as readings have generally been trending lower since 2019. All of this is not necessarily to say Cyber Monday and Black Friday are less important than in the past, but instead have likely become more ingrained into the holiday season and thus less talked about/researched.

As for how that translates to retail stocks, like consumers, investors appear to get lower prices from retailers during the busiest shopping days of the year! On average, the SPDR S&P Retail ETF (XRT) has declined 0.22% on Black Friday during its history and 1.3% on Cyber Monday. That compares to an average gain of 5 bps on all days. Additionally, there has been little consistency in positive price action. XRT has only risen a little better than a third of the time on Black Friday and just 17.65% of the time on Cyber Monday. In other words, today’s 0.66% drop in the ETF is by no means unusual. 

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