More U.S. shoppers than expected kick off holiday spending season

More than 174 million U.S. shoppers made purchases over Thanksgiving weekend and Cyber Monday, the National Retail Federation said on Tuesday, beating the industry group’s expectations and signaling a strong start to the holiday quarter.

The NRF, which had estimated about 164 million shoppers, attributed the even stronger turnout to better technology and discounting, low unemployment, rising consumer confidence and good weather across the country.

“The climate was right, literally and figuratively, for consumers to tackle their holiday shopping lists online and in stores,” NRF Chief Executive Matthew Shay said on a media call.

The holiday season can represent 20 to 40 percent of annual sales for many retailers.

The long weekend had set retailers up for a strong finish to the year, Shay said, but they would need to keep inventory tight to deliver similar or deeper discounts that the vast majority of consumers are expecting for the rest of the holidays.

Shoppers on average spent $335.47 over the five-day period, with older millennials spending the most at $419.52 each, according to the NRF survey of 3,242 consumers on Nov. 25-26.

The figures are not comparable to the average 2016 Thanksgiving weekend spending of $300 because the methodology had changed and the year-ago survey excluded Cyber Monday.

Online shopping rose sharply this year, with Cyber Monday becoming the largest online sales day in history at $6.6 billion, according to retail analysts and consultants. Sales on Thanksgiving and Black Friday also topped prior years and e-commerce leader Amazon.com Inc said it broke sales records this weekend.

Preempting a decline in visits to brick-and-mortar stores, many traditional retailers have invested heavily in their websites, bulking up delivery options, and tightening store inventories to ward off any post-holiday liquidation that would weigh on profits.

The NRF said retailers’ investments in technology had paid off, noting that internet-only shoppers totaled more than 58 million during the 5-day period, over 64 million shopped both online and in stores, and about 51 million spent only in brick-and-mortar stores.

Retail research firm ShopperTrak said on Saturday that store traffic fell 1.6 percent on Thanksgiving and Black Friday compared to last year.

“The early parts of both days were busy but ongoing store traffic wasn’t stellar, and it wasn’t consistent from store to store, or mall to mall,” NPD Group’s chief retail analyst Marshal Cohen said, noting that the holiday season had just begun.