Cyber Monday to Outshine Thanksgiving and Black Friday SpendingRising disposable income is bringing in the cheer and putting consumers into the spirit of the holidays
By IBISWorld Analyst Olivia Tang
Rising disposable incomes are bringing in the cheer and putting consumers into the spirit of the holidays. As a result, IBISWorld expects spending for Thanksgiving, Black Friday and Cyber Monday to all rise in 2012. Thanksgiving spending will reach a record high as the economy recovers. Consumers will also continue taking advantage of Black Friday deals, although spending for the occasion will grow only marginally. However, Cyber Monday will be the rising star this season, achieving a record-setting $1.5 billion for 2012.
This Thanksgiving, spending on festivities will make a full recovery from the recession, rising from a low of $6.7 billion in 2009 to $7.8 billion in 2012. Despite increasing food prices and related expenses, higher disposable incomes will allow consumers to increase their expenditure on traditional Thanksgiving purchases, which will facilitate a 6.4% rise in spending.
Turkey purchases make up the largest segment of Thanksgiving purchases, accounting for just over half of total spending. According to the US Department of Agriculture (USDA), the average price per pound of frozen turkey has increased 2.5% to $1.09 in 2012 due to producers raising their prices to combat the rising cost of feed. However, producers also slightly increased their production volumes, softening the extent of the price hikes and resulting in an anticipated 7.1% rise in turkey spending to $4.2 billion in 2012. Other food purchases, such as side dishes and desserts, will also increase 8.4% for the year and account for $978.6 million.
Black Friday and Cyber Monday
Black Friday will remain one of the biggest shopping days of the year, but busy consumers will shy away from brick-and-mortar retailers for the convenience of online shopping and the ability to avoid overwhelming crowds and long lines. Also, more retailers are extending Black Friday deals throughout the entire weekend so consumers can take advantage of deals on alternate days. Therefore, spending on Friday alone is forecast to rise only 0.1% to $12.2 billion. However, overall weekend spending will grow at a faster 2.8% for 2012.
Although Cyber Monday’s estimated $1.5 billion for 2012 is only a fraction of Black Friday spending, Cyber Monday’s revenue is projected to skyrocket 21.4%. Consumers increasingly prefer the convenience of online shopping over visiting traditional stores. Websites dedicated to compiling Cyber Monday deals are also facilitating this rapid growth by making it easier for consumers to navigate the extensive and growing list of deals.
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