Shoppers head to malls in final runup to Christmas. But Covid hot spots threaten last-minute boost

The need for procrastinating shoppers to get gifts under the tree in time for Christmas was more compelling this year than snagging Black Friday doorbusters.

The number of shoppers who turned up at stores on the final Saturday before Christmas — known as “Super Saturday” in the retail industry — fell from a year ago. But the declines weren’t as steep as those seen on the Friday after Thanksgiving.

In fact, shoppers across the Northeast may have found parking spots at malls hard to come by on Saturday, as snow started to melt from a massive storm that barreled along the East Coast earlier in the week. Lines formed outside stores observing capacity restrictions, and some found shelves bare in categories like board games and toys. These familiar holiday scenes were likely a welcomed sight for retailers, amid signs that an economic recovery that began in the summer has been faltering with Covid-19 cases continuing to surge.

RetailNext, which provides cameras, software and analytics to retailers, said the number of shoppers fell 40.9% compared with the last Saturday before Christmas in 2019. By comparison, traffic was down 48% on Black Friday this year from a year ago, RetailNext said.

Black Friday often is the busiest shopping day of the year, with Super Saturday trailing behind it. This year, amid the Covid health crisis, many retailers over the Thanksgiving weekend didn’t see crowds of people fighting to get the best deals on flat screen TVs and kitchen appliances. Instead, the holiday season kicked off earlier than ever, with retailers from Walmart to Kohl’s enticing consumers with holiday bargains dating back to October. As a result, consumer spending has spread out.

More shopping has also shifted to the internet. But time is quickly running out to get packages by Christmas. E-commerce sales this past Saturday tallied $1.6 billion, according to Adobe Analytics, up 29.8% from a year earlier. The surge was boosted, in part, by more shoppers ordering items online and opting to pick them up curbside, at retailers’ stores. Some retailers — including J.C. Penney and Barnes & Noble — are offering incentives for shoppers who use this option.

In Covid hot spots, like California, quieter scenes played out over the weekend. In the West, foot traffic was down 47.2% on Saturday, compared with a 34.8% decline in the South, RetailNext said.

In California, traffic was especially bleak, dropping 55% year over year. Four of California’s five geographical regions are currently adhering to stay-at-home orders, which permit retail stores to operate indoors at 20% capacity. Apple has temporarily closed all 53 of its retail stores in California as a precaution.

Heading into the weekend, 54% of consumers said they still hadn’t finished their holiday shopping, and were planning to wrap that up during final week before Christmas, according to a survey by the National Retail Federation.

Brianna, 20, and her friend Valerie, 23 — both of which declined to give their last names — dashed through Simon Property’s Quaker Bridge Mall in Lawrence Township, New Jersey, on Saturday afternoon, with bags full of clothes and gifts from Old Navy, Garage Clothing and Things Remembered.

“I haven’t done anything until today,” Brianna said about putting off her holiday shopping. “I feel OK coming out to the mall. I just haven’t gone out until this week.”

At Quaker Bridge Mall, shoppers were queued up — some sipping on Starbucks hot cocoa — to enter stores such as GameStop, Apple, Pandora and Bath & Body Works. Lines of families waited their turns to speak to Santa Claus, who was sitting in an open area of the mall with a face shield on, separated from children by a row of wrapped packages.

Adele, 67, was downstairs browsing a J.C. Penney department. She said her shopping for the afternoon was centered around grabbing items for her home, and a few last-minute gifts for others. She said she was largely scaling back her holiday budget this year due to personal financial strain brought on by the pandemic.

“For the most part, I’m just going to give out a few dollars as a gift,” said Adele, who also declined to provide a last name. “I’m not looking around too much. You better believe I’m spending less. You have to be mindful.”

For the millions of Americans finding themselves in the same position, a new $900 billion Covid-19 relief bill, promising another round of stimulus payments, could not come soon enough. Lawmakers plan to pass the funding bill on Monday, and Treasury Secretary Steven Mnuchin told CNBC that people who qualify for direct payments in the new legislation could see that money hit their bank accounts in a matter of days.

With Christmas less than a week away, the promise of more money in their wallets could prompt some Americans to spend a little extra before the New Year. Qualifying individuals, including children, are expected to receive $600 in direct payments, according to the new Covid-19 relief bill, a 50% reduction from the $1,200 that were sent to millions of Americans after the CARES Act was passed by Congress in March.

“The announcement gives many confidence to spend,” said Marshal Cohen, a chief industry advisor at NPD Retail. He added that retailers saw two key spending lifts in the spring and summer, before and after the first round of stimulus checks hit.

However, the new stimulus — like the earlier one — may be spent disproportionately at retailers who sell essentials, like Walmart, Target and Amazon. These companies have held up much stronger during the pandemic because they sell groceries and other household goods. Shoppers who visit them often end up adding extra items such as clothing, makeup and electronics to their orders. Apparel chains and department store operators, mostly based in malls, have fared worse in 2020.

The stimulus from the CARES Act “provided much more of a bump than I thought it would in the summer,” said Retail Metrics Founder Ken Perkins. “It was really remarkable how much of that money flowed into the retail space.”

But, Perkins cautioned, because negotiations in Washington, D.C., for the new Covid relief bill have spanned months too long, “I wonder if the people who need that money the most will be able to use it on extra things. … I think it will have to be spent more on essentials.”